OMG my father in law gave us an amazing offer today

[RosieLeaLovesTea]

OMG my father in law gave us an amazing offer today. He lives part time in HK and has made some property investments and sold some. Today we had a video call and he is offering to pay off our mortgage! Wow! What an amazing offer.

Our mortgage is not that high because we bought a doer upper 10 years ago and have been doing it up. It’s risen in value so we have a good amount of equity.

My DH have been talking about moving to a more expensive house in an area with better schools.

If we did this we could probably afford to rent our house out and make some decent money on it because the mortgage is low.

What he would give us would be approx 50% of new house value and we would she a bigger mortgage than now.

I am struggling a bit with the choice cause being mortgage free at 43 feels so freeing!

What would you do?

*agency fees

Plus don’t forget you’ll have to pay tax on rental income at your highest rate. So even if you’re only on 20%, you’ll generally only take home about 40% a year after taxes, fees and costs.

sorry you’ll take home about 60% of income after 40% fees / costs (if you’re a 20% taxpayer)

I’d say thank you very much and send him a crate of amazing whiskey as a token of appreciation.

@thisplaceisweird

Probably not show off about it on a site where many of the users are struggling to get through the next hour.

THIS.

@Greenmarmalade

People post about all sorts of things. I don’t read it unless I want to- works well for me. It’s daft to come here just to criticize.

How do you know you don't want to read it before you've read it?

What a generous FiL, it's absolutist fine to share your excitement OP.
Some very helpful comments on here and some inaccurate advice
I agree Passive investments are looking better than Rental properties in the current economic climate.
Yes, do Consider the capital gains tax if you were to rent out your current property.
Inheritance tax is usually dealt with by the executors/estate of the deceased. I am sure your FIL is hoping to live another 7 years, i would think his F.A. or Chartered tax planner will have discussed the inheritance tax options, one possibility is an insurance plan to cover the whole inheritance tax bill.

Uour guft might be part of FILs tax planning and gifted within HMRCs "rules". Tax avoidance is completely legal, it is tax evasion that is illegal.