Mumsnet has not checked the qualifications, experience, or professional insurance of anyone posting on Mumsnet and cannot be held responsible for any advice given on the site. Free legal advice is available from a Citizen's Advice Bureau, and the Law Society can supply a list of local solicitors.

Should/Could we buy a house in DD's name?

(9 Posts)
Sugarbeach Thu 27-Jun-13 15:27:07

Not sure whether to post in Property, or Money or Legal.....

DD hopefully is about to inherit a sum of money from her granddad's Will. And we are thinking what to do with it. So we thought we'd put the lump sum towards a house in her name, we'd make up the short fall of the property cost.

Can this be done?
Is it a crazy idea?
What are the legal/tax implications we need to be careful of?

A major concern is, how to protect her property which will be pre-owned before marriage or co-habitation from claims from her future spouse. Are there ways to prevent this from happening?

TIA

78bunion Fri 28-Jun-13 13:58:00

Good plan. Remember that when she sells it as she doesn't live in it she will have to pay capital gains tax if it rises in value.

The part you give her it would be wise to put in writing that you made that gift. There is no tax on gifts in the UK. The rent from letting it out must all go to her otherwise it was not a full gift from you of the part you give her. Also wise to put in writing so that if you and your husband (if you have one) divorce neither of you can try to claim that element back as one of your own assets.

If you die in 7 years (very very unlikely) then the gift element fro you falls back into your estate for inheritance tax purposes and is taxed at 40% but it is unlikely you will die in that timescale.

If you want to stop her spouse getting hands on it you could do a loan agreement to her of the part you gift to her (I was assuming she is under 18). For the rest of it, the bulk of it, the only protection is she lives with someone but does not marry him and it is not put in joint names or they marry and have a pre nup which even so is not necessarily going to be binding or you put the property in some kind of trust or company name and it is not then hers,.

It might be worth your paying an expert solicitor on trusts for an hour of advice on that trust issue. Also if she is under 18 then I think property has to be in trust for her not in her own name but again worth checking.

financialwizard Sun 30-Jun-13 20:39:17

How old is she?

Sybilvimes Sun 30-Jun-13 20:44:33

You can put a trust around the house purchase. Effectively, it means that the trust loans her the house for an indefinite period, and as such it is not officially her asset so no spouse has any claim on it, even though effectively, it is completely hers.

You need to see a lawyer who will easily be able to do this for you.

Notmadeofrib Mon 01-Jul-13 14:36:22

Her trust (formed by the will) would purchase the house and so as Sybil says the trust, not your daughter, own the property. There are tax issues, the trust may or may not be pescribed by the will (it could therefore take several forms). Are you the trustees for example?...

We have a saying: wills direct, trusts protect. You will need advice, but to be honest it's not very difficult.

Sugarbeach Tue 02-Jul-13 14:25:43

Thanks for all the great information ladies! Bit confused now until I can get my head round this and speak to a solicitor.

financialwizard -DD is approaching 9.

It looks like we won't get DD's Will funds in time to purchase the house we want (some complications and dispute between SIL and DH which have yet to run its course). So we'll go ahead and purchase the house in our joint name anyway and put it in some sort of trust later for DD. Can this be done? Or does the trust have to be created for her AT THE TIME OF THE PURCHASE?

And who owns the trust property, if DH and I have paid for it and want to "give" to DD through the trust? I all seems very complicated to me.

TIA

newcupboards Thu 04-Jul-13 20:45:35

That's why you need to shell out for the advice of a solicitor who specialises in trusts!

Notmadeofrib Fri 05-Jul-13 12:07:42

Yes too long to go into on here!

A STEP qualified IFA could do the work too - look for someone who is also chartered.

eurozammo Fri 05-Jul-13 12:10:41

The trust owns the trust properly legally; your daughter would have beneficial ownership. A solicitor will be able to take the time to explain this you you.

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now