Mum gifting us house deposit

[SebastienCrabSauce]

My DP and I are looking to buy a house and my mum has kindly offered to gift us £30k towards a deposit.
I say gift... we will be repaying her at £300pcm over the next few years.

How does this work legally with regards to tax? Can she just gift it to us or will we be required to pay tax on it?

There can be IHT implications if your DM was to die within 7 years.

However, I think there can be implications for your mortgage, as mortgage companies usually ask for confirmation that it is a gift not a loan.

If you are paying it back that is a loan. We were gifted a deposit and FIL had to make a declaration that it was a gift and show where the money had come from under money laundering rules.

You need to discuss this with a mortgage advisor.

If you are paying it back it's not a gift. You'll need to speak to a solicitor about this. My mum paid my deposit for my first flat. Instead of paying back monthly she set a charge against the property so she still owned that amount of money. Then when we sold she got it back. Except she at that point just gifted it to me fully to roll into my next house.

If it's a loan I think your mortgage company will factor this into affordability so it may impact on your borrowing. I'm not a specialist though so I would seek advice.

It is a loan not a gift. You need something in writing as it will affect the estate should she die while the arrangement is in place. There are annual allowances for specific cash gifts to avoid the full value being included, but not loans.

The mortgage company as fine with us repaying it, we earn a hefty salary but have been unable to save a deposit due to circumstances and the house we want is available now.
We can easily afford the mortgage and £300 repayments

My mum did this for me. She had to write a letter stating it was a gift. I wasn’t allowed to say I was paying her back as this would then be classed as a debt. I also had a dress of trust written so that the amount or percentage of the initial cost of house, which ever was greater, was mine in case we split. (Very glad I did that as we did split and he wanted half the house!!)
No tax was payed as under the threshold and the amount was £38000.

I was just concerned with any implications tax wise about her transferring £30k in one go into our account

As pp have says, as this is a loan not a gift it will affect things. Find a good broker who can look at different mortgage option for you. One option is a family springboard mortgage to protect your mum’s money.

The loan will be become a gift in the next year or so though.
So situation is my mum has a property abroad which is up for sale, she planned to gift us £30k from the sale of that but it hasn’t sold yet.

Mum cannot gift us the £30k at present as it would leave her with nothing to live on, hence why we will be paying her £300pcm.

The property we want needs to be purchased within the next 6-10 weeks or we’ll lose it.

When her abroad property is sold she will pay us back however much we have paid her.

The mortgage advisor is fully aware of the situation, that is not what my question was about.

I just wanted to know if the £30k lump sum would be taxed

No it's not taxed

Just as you wouldn't get taxed for taking out a loan or receiving a gift (unless we are talking about IHT that could be payable if your mum sadly doesn't live for 7 years after it becomes a gift )

It's not the ability to repay the loan to your mum most Mortgage companies have issues with its the fact that as accepting the money as a loan your mum has a financial claim / interest in your house. So if the house was to be sold you'd need to replay your Mortgage and your mum. They don't like that kind of conflict

As another posters has said, if this is a gift, make sure you put something in writing to protect this in case you were to split.

No then. It won't be taxed. But you we'd need paperwork for the loan. If she passed away then you would owe the money to the estate for the purposes on IHT (I think). I ce she gifts it to you I think you have 7 years from that date where the same applies. After that period it becomes exempt from tax.

I just read up on all this for MIL but happy to be corrected by tax specialist folk if I've misunderstood anything.

Great
Thanks everyone for the advice

its the fact that as accepting the money as a loan your mum has a financial claim / interest in your house

No it doesn't. It only gives her an interest if her loan is secured against the house. It sounds like this is an unsecured loan so it will not give the OP's mother a claim.