Buying House for Children
Discussion
What is the best way to help purchase a house for a child? I don't particularly want to retain any interest in it so I don't need my name on the LR details.
If I buy the house I''d be paying second stamp duty & then there would be issues (more SD?) when it's transferred to them.
If I give them the money there's reams of AML checks to go through.
Are there any other options & issues?
If I buy the house I''d be paying second stamp duty & then there would be issues (more SD?) when it's transferred to them.
If I give them the money there's reams of AML checks to go through.
Are there any other options & issues?
Rupert58 said:
What is the best way to help purchase a house for a child? I don't particularly want to retain any interest in it so I don't need my name on the LR details.
If I buy the house I''d be paying second stamp duty & then there would be issues (more SD?) when it's transferred to them.
If I give them the money there's reams of AML checks to go through.
Are there any other options & issues?
Will you be buying 100% or will they be getting a mortgage / using existing savings etc ?If I buy the house I''d be paying second stamp duty & then there would be issues (more SD?) when it's transferred to them.
If I give them the money there's reams of AML checks to go through.
Are there any other options & issues?
Nicetobenice said:
The AML checks are there no matter how you do it.
If it's a cash purchase then you just have to be able to show were the money has come from.
It's a PITA but not insurmountable
Not insurmountable but a real PITA. If it's a cash purchase then you just have to be able to show were the money has come from.
It's a PITA but not insurmountable
I’ve said before why can’t there just be one defined list of papers needed for the solicitors to sign off.
Just because the money comes from Bank A doesn’t necessarily satisfy some where it actually came from in the first place.
alscar said:
Not insurmountable but a real PITA.
I ve said before why can t there just be one defined list of papers needed for the solicitors to sign off.
Just because the money comes from Bank A doesn t necessarily satisfy some where it actually came from in the first place.
Yes in this case the OP would have to go through the AML requirements as if he was buying it himself and would need to demonstrate the source of the funds. I ve said before why can t there just be one defined list of papers needed for the solicitors to sign off.
Just because the money comes from Bank A doesn t necessarily satisfy some where it actually came from in the first place.
If you aren't an actual money launderer with experience of doing this it feels incredibly intrusive
Nicetobenice said:
Yes in this case the OP would have to go through the AML requirements as if he was buying it himself and would need to demonstrate the source of the funds.
If you aren't an actual money launderer with experience of doing this it feels incredibly intrusive
For one of my children I ended up writing a letter explaining that most of the money had built up over many years from my employment. If you aren't an actual money launderer with experience of doing this it feels incredibly intrusive
This was on top of the various bank statements that had already been supplied.
This was still deemed not good enough so I ended up giving them copies of my last 3 P60’s from when I was still working.
Don’t get me started on the ID apps for the ID checks which are done first - it’s the passport check which they seem to struggle with- driving licences are much easier.
Done this.
Conveyancer did the usual AML stuff, then asked for original source of funds. I said this was impossible to define, as you don’t keep track of where every individual £ came from - salary, investments, sale of assets? I said it’s my money, it’s above board, HMRC Connect knows all about it, that’s all I had to say.
In the end they wanted a letter signed that said the funds came from me, they were an unconditional gift and I retained no interest in the property.
They also made me pay for another hour’s consult where a different partner “acting in my interest” told me that she had to recommend I didn’t give the money as I couldn’t get it back.
All a bit of a ballache but just jump through their hoops and it should be ok.
Conveyancer did the usual AML stuff, then asked for original source of funds. I said this was impossible to define, as you don’t keep track of where every individual £ came from - salary, investments, sale of assets? I said it’s my money, it’s above board, HMRC Connect knows all about it, that’s all I had to say.
In the end they wanted a letter signed that said the funds came from me, they were an unconditional gift and I retained no interest in the property.
They also made me pay for another hour’s consult where a different partner “acting in my interest” told me that she had to recommend I didn’t give the money as I couldn’t get it back.
All a bit of a ballache but just jump through their hoops and it should be ok.
Not wanting to hijack the thread but what happens if you already own a property and want to gift it to your child?
My wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
My wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
PhilboSE said:
In the end they wanted a letter signed that said the funds came from me, they were an unconditional gift and I retained no interest in the property.
I've done it a couple of times and that letter is standard.Last one (last summer) I did it in wife's name (she's never earned much but our cash savings were in her name for tax reasons). The money had been moved around quite a bit chasing interest rates.
I had a bit of an "oh s
t" moment when they asked for details and all I could immediately send was a statement for the account opened 2yrs prior with a chunk of money and nothing had happened in the account in the meantime. Must admit I was a bit gobsmacked when they came back and said it was fine. They learned absolutely nothing about the original source of the money - except that, I suppose, the source of the funds our daughter had was her mother.
ChrisH72 said:
Not wanting to hijack the thread but what happens if you already own a property and want to gift it to your child?
My wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
If he wants to live there, just let him live there...My wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
As I am currently acting as an executor for a deceased's estate, if gifting money to a child to buy a house then keep a clear record of the transaction as it could attract inheritance tax and an executor would need to be able to audit rail the money. Might be worth printing off a IHT403 form and adding the transaction, and keep the form safe and accessible for whoever might need it one day.
The “ money is a gift not a loan “ part has been part of any mortgage application for many years but as said worth also including in any letter you write as additional back up.
For any “ material “ gifts made over the years for the children and especially for their house purchase funds I just keep a copy of the bank transfer transaction.
For any “ material “ gifts made over the years for the children and especially for their house purchase funds I just keep a copy of the bank transfer transaction.
ChrisH72 said:
Not wanting to hijack the thread but what happens if you already own a property and want to gift it to your child?
My wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
A nice CGT billMy wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
Voldemort said:
ChrisH72 said:
Not wanting to hijack the thread but what happens if you already own a property and want to gift it to your child?
My wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
If he wants to live there, just let him live there...My wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
ChrisH72 said:
Not wanting to hijack the thread but what happens if you already own a property and want to gift it to your child?
My wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
There are as you might expect quite a lot of online articles about this topic and the nuances on trusts and ages and alternative options etc. My wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
I clicked at random on the first one - Saffery’s for instance.
Seemed a pretty good start.
Puzzles said:
ChrisH72 said:
Not wanting to hijack the thread but what happens if you already own a property and want to gift it to your child?
My wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
A nice CGT billMy wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
It's too early to say exactly what will happen at this stage but giving it to him is an option we are considering.
important question is - how old are the children?
my daughter is 10 and I set up a junior ISA a few years ago to mitigate some of this so she'll have a fund of money, in her name, when she turns 18
there's obviously a risk with that, if she wants to just 'piss it up the wall' but hopefully we can guide her into putting it aside for a first home etc.
my daughter is 10 and I set up a junior ISA a few years ago to mitigate some of this so she'll have a fund of money, in her name, when she turns 18
there's obviously a risk with that, if she wants to just 'piss it up the wall' but hopefully we can guide her into putting it aside for a first home etc.
ChrisH72 said:
Puzzles said:
ChrisH72 said:
Not wanting to hijack the thread but what happens if you already own a property and want to gift it to your child?
My wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
A nice CGT billMy wife owns a rental property. At the moment our son is only 10 but I'd imagine in around 10 years time she will probably want to stop doing the rental as we will be close to retirement. I don't think we will need the money so it's possible the property could go directly to our son. How would that work? I'm guessing there would be some CGT to work out but are there any other pitfalls?
It's too early to say exactly what will happen at this stage but giving it to him is an option we are considering.
I know again they’d have to pay but together it takes out a chunk of value.
I'm not sure why people are saying that lending the money / AML checks are a PITA.
I lent money to my eldest to buy her place and it was fine (IIRC I had to provide ISA bank statements showing where the money was coming from but it was literally a case of printing out 6 months worth of statements, dropping them off at the Solicitors office and signing something).
I'm not sure if it made a difference but we've used the same solicitor going back about 30+ years.
I lent money to my eldest to buy her place and it was fine (IIRC I had to provide ISA bank statements showing where the money was coming from but it was literally a case of printing out 6 months worth of statements, dropping them off at the Solicitors office and signing something).
I'm not sure if it made a difference but we've used the same solicitor going back about 30+ years.
Gassing Station | Finance | Top of Page | What's New | My Stuff