Posting for traffic - is this legal, anyone with any knowledge of tax laws, large sum gifts etc please can you help?

[notsuchabigcheesenow]

DD, aged 26, has told me her Ddad has offered to give his one-off lump sum retirement payment to her to use as a deposit on a FTB house - the condition is that he must be allowed to stay there one night a week. She would take out a mortgage for the rest. She is very excited at the prospect as you'd expect but also knows her Ddad is full of shit ideas which never come to anything so she isn't holding her breath and hasn't mentioned it again.

The sum would be in the region of £120,000 or so.

He is also, she says, due to receive half of the sale proceeds of a house he bought with his former partner who was the OW he left me for, but this relationships didn't last. I know a little about the house and it is in a very expensive part of the South but I don't know much more and I'm not interested really.

My concern is this: that this smells a bit whiffy to me. I say that because he had form for dodginess before, and during, our marriage (gambling, tax evasion, theft of money from my account) . I don't want to expand on that, it's all in the past and I have no ties with him whatsoever now, apart from our DD. She has Autism and has a good and promising career in one of the public services; she has worked very hard indeed and she has such a bright future. Where things can, and have, gone awry is that her ability to read and discern other people's communications and intent has made her vulnerable in the past.

When she told me what he has put to her I asked a couple of questions about, i.e. has she checked out that this is possible re: mortgages, tax, why for example he would have to stay there one night a week when he is renting a perfectly good property of his own.

She doesn't know what the details would look like and when I said I thought she should consult and take ALL paperwork to a solicitor before agreeing to anything or signing anything she got the huff and said that "he's my Dad, he isn't going to do anything dodgy to me".

I'm afraid I don't agree but in any case, what I'm worried about is that if this is not completely above board she might walk into something that comes back to bite her later on.

Is this legal, would there be tax implications for my DD? Would a solicitor raise the kind of questions that I don't know to ask?

The other worry is that because of the nature of her job, I would worry she'd lose her job if indeed this were anything but completely above board.

For a house purchase she will need proof of where the deposit has come from and he will need to verify this - is he able to do that?

There is no tax for receiving a gift unless the giftee dies in the next 7 years when it could be classed as part of his estate for IHT

I'm guessing he could verify, yes.
I was also thinking about the 7 year thing - there is a possibility that this could happen, yes.

But if not, I'm relieved to know that she wouldn't be financially penalised for accepting the gift.

it could potentially be a GIFT WITH RESERVATION, as he says he will live there 1 night a week, which is more than the acceptable - i give my kids a house but i may occasionally visit them. But then its cash, not the house and zero obligation for the daughter to actually let him stay when she gets the house.

Just means it potentially won't be exempt from inheritance when he passes.

Well done your daughter; it's really good to see young people making progress. Could you afford to pay for an hour with a solicitor or an accountant? They would give expert advice. Considering the sums involved, £250 - £400 would IMHO opinion be money very well spent. If not, Shelter gives excellent advice on all sorts of housing issues.

Thank you.
I'll willingly pay for a consultation with a solicitor, although Ddaughter hasn't yet had any further details about how much or when he would be gifting the money as he will need to retire from his job first.

I have to be mindful that this isn't really any of my business and she is an adult so I can only make suggestions in as neutral a tone as possible (it's hard to sound curious when really I feel suspicious).

I'd like nothing better than for her to be able to find herself a home she can call her own rather than renting rooms out in other people's. places.

It will be a pre owned asset tax charge on him. He will have to declare it and pay income tax on it in his self assessment each year unless he opts to have it as a gift with reservation of benefit for inheritance tax purposes.

So, @tigger1001 your answer makes me think that perhaps this is a way of giving her something she'd otherwise have little chance of obtaining for a very long time and in a way that doesn't penalise her later on i.e inheritance tax. I'm thinking that's the kind of thing they would need to have a dialogue about with a lawyer.