Give or loan towards DD’s down payment?

mokryna, If you have the spare money it is best given as an outright gift. We gifted our youngest daughter a substantial deposit when we moved house to a different part of the country. Her work was in London and, in effect, we were making her homeless. Her other sisters already had their own homes and received minimum help from us. We just hadn't that sort of spare cash then. We discussed it with them and said they would get their share of the sale when we died. They were happy with that. Our youngest didn't have a partner, so no second income and we wanted her to have a relatively small mortgage she could manage alone. Germanshepherdsmum is correct when she says they will do strict checks on where the money comes from and if it is a gift or loan. We had to confirm for the mortgage company that is was an outright gift. This is because the mortgage company always has first call if they renege on payments or go bankrupt and the house has to be repossessed and sold.
As an aside, the £3000 a year you can give as a gift free of IT must come out of general income and not savings. Some weird HMRC condition.

Greta8: we just had to provide evidence of the source of funds to a solicitor and provide a letter saying it was a loan not a gift.

I think you menat to say "a gift not a loan"

Like most couples, they will probably have got the biggest loan they can afford and it would be assumed that they wouldn't be able to pay back another loan.

Solicitors are concerned about money laundering so always wish to see evidence of the source of the loan, including ID and bank statements from the donors.

I was left an inheritance from my grandmother back in the 1970s and there were none of these ridiculous money laundering or other regulations in place then.

I helped mine out with deposits (a gift) as it makes sense for them to have it when they need it. What's the point in squirreling it away until I die?

We gifted our daughter a small sum a few years ago. If it had been a loan it would have been seen as a debt by the mortgage lender. This may have meant a reduced offer.

We had to have formal paperwork that it was a gift BTW.

What is the legal amount one is allowed to gift to a child annually, please?

Young couples 'buy' very expensive (yet ordinary) houses, here in London - always with family help. Often, the house is, in fact, an investment, belonging to many family members.

AFAIK Everyone can give a max of a £3k lump sum annually, but smaller cash gifts out of income are also allowed. But that is not per child - it’s a maximum.

The £3k can be backdated by a year I think, so £6k if you didn’t do it the previous year.

The limit has been the same for ages - high time it was increased!

It’s £3000 per year tax free Kim19. To use up mine, I put the maximum monthly amount (£200) allowed into a Help to Buy account for my son to help towards a deposit when he’s ready to buy a house. They have discontinued that scheme for new savers, but I think there’s an alternative.
When my daughter got married, myself and her husband’s parents gifted them the same amount each towards their deposit, so there should be no dispute if they were to split later (not that I think they will) as they both have an equal stake in their home.

We helped our son with the deposit for his flat, the mortgage lender made us complete a form to say this was a gift not a loan. Fairly simple.
We had recently given Daughter a lot of money for her wedding so told son if he gets married he wouldn’t get much from us to help. They were both happy with that.

Wyllow3.
Good idea. If we move we will buy first rather than try to do both buy and sell at same time.

We gave money to both children for their deposits. After taking legal advice this was given as gifts. If they were not married then a Deed of Trust would be drawn up to protect the money should they split up. Once married this Deed was null and void, as normal married couple’s laws override it.
We have fortunately, lived over the 7 years, but the tax burden decreases each year until the 7 years are up.
Of course you are allowed to gift money to your children so that amount can also be deducted from the whole sum.

Devorgilla

mokryna, If you have the spare money it is best given as an outright gift. We gifted our youngest daughter a substantial deposit when we moved house to a different part of the country. Her work was in London and, in effect, we were making her homeless. Her other sisters already had their own homes and received minimum help from us. We just hadn't that sort of spare cash then. We discussed it with them and said they would get their share of the sale when we died. They were happy with that. Our youngest didn't have a partner, so no second income and we wanted her to have a relatively small mortgage she could manage alone. Germanshepherdsmum is correct when she says they will do strict checks on where the money comes from and if it is a gift or loan. We had to confirm for the mortgage company that is was an outright gift. This is because the mortgage company always has first call if they renege on payments or go bankrupt and the house has to be repossessed and sold.
As an aside, the £3000 a year you can give as a gift free of IT must come out of general income and not savings. Some weird HMRC condition.

I really don't think your last paragraph is correct but would appreciate more information if you believe it to be so

Thank you for advice above GSM. 👍

😊

We've gifted all our children and suitably aged GC home down payments. Can't take it with you. The rules are strange, to me, solicitor sorts.

There is also a provision for small gifts, not sure why people can't give everything they wish - but rules. I keep records.

biglouis

I was left an inheritance from my grandmother back in the 1970s and there were none of these ridiculous money laundering or other regulations in place then.

ridiculous ?

You can gift up to £3000 per annum each to family members but it must come out of income. For that reason keep good records. They come in handy when you 'become an estate' aka die!

Thanks Witzend and Casdon. Appreciated.

There is a couple down the road from us and his dad lives with them. He sold his house and gifted them the proceeds of the sale less the mortgage, this was £90,000 ninety thousand pounds and the agreement was that he lived with them but he was not on the deeds to the house,

She has now decided marriage is not for her and wants a divorce.

She wants the house sold and wants half the proceeds and is not at all interested that the £90k was from the dad.

Effectively she is going to get half of the dads contribution £45k for nothing and there is nothing he can do about it

Aveline

You can gift up to £3000 per annum each to family members but it must come out of income. For that reason keep good records. They come in handy when you 'become an estate' aka die!

Please can you post a link to information saying it must come out of income. Because that is not what we have advised and I can see no mention of it on the gov website.

eddiecat78, My solicitor informed us of that so I assume it is true. I think it is because they take a dim view of people giving away their savings when they may need it for care. In the same way you can't gift your house to your children and continue to live in it rent free as that is a benefit to you.
You can read all the rules on HMRC site.

Website is www.gov.uk/inheritance-tax

That will give you accurate information on any aspect of tax, and a lot more eloquently than I can.
I used the word 'weird' because, not being a tax expert, I find some of the content/reasons weird. Presumably the regulations are all laid down by the Government of the day. Happy reading.

I think you can give £10,000 as a wedding gift with no tax implications. Check Gov website.

Just read your post above this. I really can't help you beyond the info I have listed above. I can only go on what I was told, which I observe in any gifts to family. If I find out a source I will post it.