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mortgage for dependent relatives - tax implications

(8 Posts)
Willow33 Thu 29-Aug-13 06:07:06

No they never owned it, they were renting it privately. They don't receive benefits.

So does that make a difference?

PrincessFlirtyPants Thu 29-Aug-13 00:11:01

Yes, did they own the property before and sell it to you and your sister?

Viviennemary Wed 28-Aug-13 23:11:14

I think perhaps if they are claiming Housing Benefit to live in this house owned by you and your sister then there may be some implications. If it is only £100 a month then the money could be gifted to your sister and wouldn't need to be specifically for the repayment of the mortgage.

Willow33 Wed 28-Aug-13 21:47:56

Thanks Princess. The property is worth a lot and has gone up in value since we bought it. My parents I think would be contributing about £100 a month. They are both over 65 years+. Does that make a difference?

PrincessFlirtyPants Wed 28-Aug-13 21:17:39

Ah ok. I didn't know whether it was to avoid IHT, which you wouldn't be.

There's no income tax or CGT that would be payable. If the property is worth a lot of money and they are in the IHT bracket through savings there are definitely some tax implications.

Willow33 Wed 28-Aug-13 21:06:16

Hi Princess, they were sitting tenants and the opportunity arose to buy their house but due to their ages, they wouldnt be able to get a mortgage.

PrincessFlirtyPants Wed 28-Aug-13 20:40:47

Hi Willow, smile

Before anyone can assess the potential tax implications, is there a reason you and your sister own the house your parents live in?

Willow33 Wed 28-Aug-13 20:21:36

My sister and I own the house our parents live in and share the mort payments. It is a mortgage for dependent relatives. My sis said she is struggling to afford to do this but dh and I can't afford to take on more.
My parents could afford to contribute to her half of the payments but my question is does their doing so have implications for tax at any stage?

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