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  • FIRST POST
    • Not Me
    • By Not Me 13th Jun 19, 6:03 AM
    • 74Posts
    • 8Thanks
    Not Me
    Helping grandchildren purchase their own home.
    • #1
    • 13th Jun 19, 6:03 AM
    Helping grandchildren purchase their own home. 13th Jun 19 at 6:03 AM
    Sorry if this is the wrong section but I cannot see anything that fits my question.

    I will be 69 this year with plenty of life in me yet, talking to my children about money and inheritance. They would prefer that I helped my 2 grandchildren get onto the property ladder instead.

    I did a search and found the HMRC website which gave examples of gifting a lot of money away and tax being payable. The figures they used and was taxable went over 300,000. That is not the case for me. My property is approximately 110,000 to 120,000 going by the neighbours sales over the last 2 years. And I have slightly more in cash in various accounts earning not a lot of interest compared to 10 years ago.

    My pension covers all my bills comfortably even taking 4 holidays a year.


    This is getting rather long do I split it?
    Last edited by Not Me; 13-06-2019 at 6:12 AM.
Page 2
    • steampowered
    • By steampowered 13th Jun 19, 8:22 AM
    • 3,635 Posts
    • 3,752 Thanks
    steampowered
    1) when you were in your 20s (or whenever), did anyone help you buy your first home? Do you remember the sense of pride, of being 'grown up', or doing it all by yourself?? Do you want to deny this to your grandchildren?
    Originally posted by trailingspouse
    My perspective on this is that buying a first home is much harder than it was when the Op was young. That is just a statistical fact - the size of the average deposit has multiplied about 3x over the past two decades, after adjusting for wage inflation.

    The average age of a first time buyer is now 30. Statistically the average person isn't able to buy a property in their twenties.

    Though I accept it is much easier to buy in some parts of the country (e.g. the Midlands) than in others (e.g. London / South-East).

    So, if the Op was to give her grandchildren a gift towards their deposit - she could see that as simply "evening the odds", giving the grandkids the same opportunity the Op had when he/she was young.
    • getmore4less
    • By getmore4less 13th Jun 19, 8:50 AM
    • 37,369 Posts
    • 23,058 Thanks
    getmore4less
    A gift of cash sounds like a very nice idea. And it is tax free (assuming you survive 7 years).

    ......
    Originally posted by steampowered
    If you gift from excess income, even IHT doesn't come unto play.
    Originally posted by Mojisola

    IHT is not relevant till the op has saved at least another 200k
    • getmore4less
    • By getmore4less 13th Jun 19, 8:58 AM
    • 37,369 Posts
    • 23,058 Thanks
    getmore4less
    Are you in a position to help out as a mentor and cash for the business the GS is setting up?

    Feeding income into their savings is potentially a good option keep the cash back till they are ready to take the ownership move.

    I can see where you are coming from for the GS that is renting but that has major issues with your current thinking.

    I would look at the bigger picture on that one as one advantage of renting is mobility and for younger people that can be a significant benefit as life is still developing.
    • AnotherJoe
    • By AnotherJoe 13th Jun 19, 8:58 AM
    • 15,913 Posts
    • 19,135 Thanks
    AnotherJoe
    Not living together no. Just sharing the costs to purchase a property which will then go onwards to help them both have their own.
    Originally posted by Not Me
    I don't think you've thought this through at all.
    Please explain how you think it would help..
    So one of them would live in the house. The other wouldn't.
    How is the one that doesn't live in it being helped??
    They would have lost their ftb status when they come to buy their own house, that is worth thousands of pounds. They will not be eligible for HTB, again, potentially thousands of pounds.
    They still have to live somewhere so have to pay rent or continue with m&d
    The one that does live in the house is being helped by not paying rent. How do you equalise that?
    The one that doesn't is equally liable for the costs of the house they don't live in and for paying the mortgage should the one that lives there get into difficulties.
    When the one that doesn't live in the house wishes to buy their own, they will need to force a sale evicting the one that does, or the one that does will need to raise a larger mortgage in order to buy out the share of the one that doesn't.
    If the one that does live in the house brings in a partner or lodger how are the expenses shared so it's fair to the one that doesn't?

    I suspect you have some old style thinking here that house prices are rising so get on and buy and gain from the rise but that's not happening now plus there's a raft of additional costs and benefits to a first time buyer that they would be losing.

    However you help them, getting them to buy a house together is absolutely not helping at all , will raise their costs when they do buy houses , and may cause conflict if the timing if buyinga Nd selling can't be agreed between them. Nice intentions, terrible idea.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Catswhiska
    • By Catswhiska 13th Jun 19, 8:59 AM
    • 101 Posts
    • 84 Thanks
    Catswhiska
    If either of you need residential or nursing home care in the future it is likely the council will see it of deprivation of asserts and treat the money as still yours. My mum was fit and had a stroke at 70. Her home was sold to pay for her care
    • Not Me
    • By Not Me 13th Jun 19, 9:31 AM
    • 74 Posts
    • 8 Thanks
    Not Me
    Wow. Seems to be open a can of worms and finding its a can of rattlesnakes. Just read that back and need to comment that is not aimed at the responses but the situation that can/could arise from my initial (ill conceived) thoughts.

    Thank you.

    Granddaughter is saving and her goal is buying a house. Currently single. A help to buy ISA would work and help 100%

    Grandson on the other hand has a partner and renting. At the moment he works for someone and mentioned about buying into that business. I am not so sure its a good plan, have an uneasy feeling he maybe taken for granted. Will he be any better off being a partner in the business or just a way for his employer to offload some costs?

    Currently he only gets paid for the jobs he does. He has been doing the odd job himself and buying the tools required for each job.

    A little apprehensive on whether it is all above board.

    My son (his uncle) has just given him his old car after being offered just a few hundred at trade in. That could double as a family car and van.


    Thank you all for your suggestions.



    PS. Where is best to find out about those ISA's? 250 per month and the 4000 per year? Read something is stopping later this year, but you can still take advantage now?
    • Mojisola
    • By Mojisola 13th Jun 19, 9:46 AM
    • 31,544 Posts
    • 80,884 Thanks
    Mojisola
    PS. Where is best to find out about those ISA's? 250 per month and the 4000 per year? Read something is stopping later this year, but you can still take advantage now?
    Originally posted by Not Me
    www.bbc.co.uk/programmes/p02pc9xt/episodes/downloads
    Last Monday's clip - 5 minutes in - Martin talks about this.
    • steampowered
    • By steampowered 13th Jun 19, 10:37 AM
    • 3,635 Posts
    • 3,752 Thanks
    steampowered
    PS. Where is best to find out about those ISA's? 250 per month and the 4000 per year? Read something is stopping later this year, but you can still take advantage now?
    Originally posted by Not Me
    Have a read of MSE's guides to "help to buy ISAs" and "lifetime ISAs" here: https://www.moneysavingexpert.com/savings/lifetime-isas/ https://www.moneysavingexpert.com/savings/help-to-buy-ISA/

    You would probably need to get your grandson and granddaughter to open the ISA themselves, and then pay into it.
    • getmore4less
    • By getmore4less 13th Jun 19, 10:51 AM
    • 37,369 Posts
    • 23,058 Thanks
    getmore4less
    If either of you need residential or nursing home care in the future it is likely the council will see it of deprivation of asserts and treat the money as still yours. My mum was fit and had a stroke at 70. Her home was sold to pay for her care
    Originally posted by Catswhiska
    deprivation is often overplayed.

    A large chunk out of the cash asset base could be an issue but as long as there is no visibility of care and there is a good primary reason to dispose as in this case deposit for a grandchilds house that mitigates the risk.

    The other thing is OP has surplus income and that is untouchable as you can use that for whatever you like.

    The council cannot retrospectively say you should have saved more.

    A combination of giving away income and spending some of the capital(more holidays) would be very difficult to class as deliberate deprivation.


    It is upto the OP to decide what levels of wealth they want to keep should more resources be needed for say care and we are not privy to any help that may be provided by family.

    if they are happy with the levels they have then further accumulation is not needed and untouchable if given away.
    Last edited by getmore4less; 14-06-2019 at 7:07 AM.
    • Cakeguts
    • By Cakeguts 13th Jun 19, 11:18 AM
    • 6,659 Posts
    • 10,479 Thanks
    Cakeguts
    How about you open some sort of savings account in both their names and put money into it so that it is there if they need it and if they don't it can sit there and they will eventually get a nice little nest egg?


    The important thing is not to take away their pride in doing their own housing without help from grandparents/parents even if that housing is renting.




    Times have changed and some young people prefer to rent because it takes away the saving for repairs and maintenance of their own property plus they can afford to rent a bigger property than they could afford to buy and they can move if they want to without all the hassle of buying and selling.



    Those of us who are old and basically had to buy because there wasn't enough good property to rent (rent acts etc) are actually now out of date with what many of the young want in the form of housing.
    • lookstraightahead
    • By lookstraightahead 13th Jun 19, 3:38 PM
    • 1,380 Posts
    • 1,286 Thanks
    lookstraightahead
    Do they want to buy houses? Perhaps give them some money and let them make their own choices - a property isn't on everyone's bucket list.
    • markin
    • By markin 13th Jun 19, 6:28 PM
    • 846 Posts
    • 692 Thanks
    markin
    Well it sound like he needs a real work van, and money to buy tools and set up, Just give them both a one off 10K each.

    Just don't expect them both to do the right thing with the money, and don't get angry if they take a holiday!

    Let them enjoy it, if that's what they want!




    And based on your house value (if a 3 bed) im guessing she could already afford to buy now, or is very close to it.
    Last edited by markin; 13-06-2019 at 6:30 PM.
    • Fire Fox
    • By Fire Fox 14th Jun 19, 2:10 AM
    • 25,149 Posts
    • 29,391 Thanks
    Fire Fox
    Wow. Seems to be open a can of worms and finding its a can of rattlesnakes. Just read that back and need to comment that is not aimed at the responses but the situation that can/could arise from my initial (ill conceived) thoughts.

    Thank you.

    Granddaughter is saving and her goal is buying a house. Currently single. A help to buy ISA would work and help 100%

    Grandson on the other hand has a partner and renting. At the moment he works for someone and mentioned about buying into that business. I am not so sure its a good plan, have an uneasy feeling he maybe taken for granted. Will he be any better off being a partner in the business or just a way for his employer to offload some costs?

    Currently he only gets paid for the jobs he does. He has been doing the odd job himself and buying the tools required for each job.

    A little apprehensive on whether it is all above board.

    My son (his uncle) has just given him his old car after being offered just a few hundred at trade in. That could double as a family car and van.

    Thank you all for your suggestions.

    PS. Where is best to find out about those ISA's? 250 per month and the 4000 per year? Read something is stopping later this year, but you can still take advantage now?
    Originally posted by Not Me
    Any money you put in your grandchildren's names that is not 'protected' or 'ringfenced' may end up being counted as assets by the DWP if they ever need to claim means-tested benefits.

    Note that there is no governmemt help for mortgage payments for many months now; when it finally kicks in it us simply a loan towards interest. So your grandchildren would need a 'rainy day fund' or appropriate insurance from day one, as well as a deposit and costs of buying.

    Someone who is newly in business will struggle to get a mortgage, is not entitled to the same means-tested benefits as employees so more likely to need to live on any savings they have access to. Depending how the business is set up, if it goes under his personal assets including his home might be at risk.

    Do you need to update your will at all, or prepare Power of Attorneys (just in case)? Just thinking you could use a session with a solicitor to ask about putting money in trust for your grandchildren, or suchlike.
    Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️
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