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All Those "gifted" Deposits


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Seems they aint gifted at all.

http://forums.moneysavingexpert.com/showthread.php?p=45069316#post45069316

parents gifted money but now want it back

http://forums.moneysavingexpert.com/showthread.php?t=3337512

Stepfather legal issue - can anybody advise me please.

I've always been against the bank of mum and dad interfering in house buying. It's certainly going to have contributed to a lot of house price inflation and now a lot of unhappiness.

How many parents will now be in a situation where they lent big chunks of money and now want it back (And not just the ones who live together)

But doesn't this also p*ss on Shapps "mates mortgages" - if you can't live with family without falling out - how can you live with friends and be tied in a financial way?

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The way my parents go on about it you would think it normal. They had a 'gift' from BoMaD. Could have been that the house they bought was over 5 times earnings (in the mid 1970s) (salary £2000, house £10000) and they had no deposit.

I'd love to buy a house for five times my earnings! It's more like 9 times at the moment!

£26,000 x 5 = £130,000. Could get a ghetto flat for that I suppose.

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...the Express doesn't and can't count... :rolleyes:

Wonder if it counts its falling circulation numbers - certainly doesn't put those on the front page! Still, wht do you expect when your readership are shoving all their money into bubbles and can no longer afford their daily rag.

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I'd love to buy a house for five times my earnings! It's more like 9 times at the moment!

£26,000 x 5 = £130,000. Could get a ghetto flat for that I suppose.

The figures in 1975.

dads salary £2000 (£15k in todays money) -was pretty much his first job, and had good career progression, on £35 or 40k by mid 80s.

House price £10000 (£76k in todays money)

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The figures in 1975.

dads salary £2000 (£15k in todays money) -was pretty much his first job, and had good career progression, on £35 or 40k by mid 80s.

House price £10000 (£76k in todays money)

What a joy to be within spitting distance of home ownership on a first crappy waged job.

Same job now 15k, same house now what 140k+

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I'd love to buy a house for five times my earnings! It's more like 9 times at the moment!

£26,000 x 5 = £130,000. Could get a ghetto flat for that I suppose.

£10k even at the beginning of the 1970s would've been firmly bottom-end of the market.

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For?

What's the tax effect on gifts?

if i remember correctly...

5k max gift for each parent is exempt from inheritance tax. anything over that will be taxed if mum and dad die within 7 years.

if they want it back it wasn't a gift.

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if i remember correctly...

5k max gift for each parent is exempt from inheritance tax. anything over that will be taxed if mum and dad die within 7 years.

if they want it back it wasn't a gift.

So what happens if a parent loans you money, then pops their clogs - are you liable for inheritance tax?

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£10k even at the beginning of the 1970s would've been firmly bottom-end of the market.

You are mistaken my friend, a little over £10k was bang on average at the beginning of 1975.

http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php

-----------Nominal----Real

1975 Q4 £11,288 £72,715

1975 Q3 £10,978 £73,121

1975 Q2 £10,728 £74,630

1975 Q1 £10,388 £79,043

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£10k even at the beginning of the 1970s would've been firmly bottom-end of the market.

I bought my first house, a new-build 2-bed maisonette in Leicester, in 1972 for £3,250. Monthly mortgage payments were cheaper than renting the flea-ridden (literally - we had to have the council pest exterminators in) one bed flat we were then in.

95% mortgage IIRC.

Edited by cartimandua51
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But if you inherit that estate surely that's CG? Otherwise parent's would sell their houses and 'loan' all of the money back to their kids.

That's exactly what they should do, with kids paying interest in cash. Of course loan docs should be drawn up to protect the parents in case their progeny dies first etc. In fact, I believe it is one of the reasons that many pensioners still have outstanding mortgages.

Edited by kilroy
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But if you inherit that estate surely that's CG? Otherwise parent's would sell their houses and 'loan' all of the money back to their kids.

Sorry - to be clear - the loan is repaid and that cash is then included in the calculation of Inheritance Tax as normal.

So Mum lends son £100k, then dies. Son repays £100k to the estate on Mum's death, and entire estate passes to dad, so no inheritance tax as spousal transfer. If Dad had already died and son gets the lot, then repays the £100k to the estate, which includes it in the total calculated asset value and pays 40% above the threshold.

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That's exactly what they should do, with kids paying interest in cash. Of course loan docs should be drawn up to protect the parents in case their progeny dies first etc. In fact, I believe it is one of the reasons that many pensioners still have outstanding mortgages.

no doubt you have a good reason to believe this such as your mates freinds best man at your 3rd cousins wedding last summer said so over a glass of Pimms in true HPC fashion

Edited by georgia o'keeffe
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I bought my first house, a new-build 2-bed maisonette in Leicester, in 1972 for £3,250. Monthly mortgage payments were cheaper than renting the flea-ridden (literally - we had to have the council pest exterminators in) one bed flat we were then in.

95% mortgage IIRC.

When I first bought in 1990 mortgages were cheaper than renting the same property then too. Not everyone could save a big enough deposit or were credit-worthy then. Same as now?

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You are mistaken my friend, a little over £10k was bang on average at the beginning of 1975.

http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php

-----------Nominal----Real

1975 Q4 £11,288 £72,715

1975 Q3 £10,978 £73,121

1975 Q2 £10,728 £74,630

1975 Q1 £10,388 £79,043

Heh. Could be much bigger regional variations back then? Or maybe imputed prices for council flats were included?

My recollection of the '70s includes moving house in IIRC 1973. Parents paid something over £18k. House was family-sized and had a decent garden, but was also thoroughly ugly.

Also recollect my mother looking at job ads: with her offspring at school, she had some time available. Most jobs I saw advertised were paying in the £1.2-1.5k ballpark.

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