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A loan from my dad

3 replies

sooperdooper · 31/01/2016 12:40

My dad owns a couple of properties outright and rents them out, they're an investment for his retirement and he now gets a steady income from the rent as well as getting his pension.

We want to move house, but don't have a huge deposit - dads offered to sell one of the properties, lend us the money as a lump sum then we pay him back each month the same amount he'd have got from the rent.

At the moment he pays tax on the rental income so he wouldn't have to pay that, it'll give us a bigger deposit and we can afford to pay the money each month.

Obviously he trusts us to pay him back, which we will, and it seems overall like a good plan but am I missing anything from a financial perspective that we should consider?

OP posts:
BlueThursday · 31/01/2016 15:28

Capital gains tax? Will you pay your father back that if he needs to pay it?

ALemonyPea · 31/01/2016 15:30

You would also have to declare to the mortgage company how you got the deposit and that you're paying it back monthly.

TalkinPeace · 31/01/2016 17:44

he's mad to sell the property and face a CGT bill
better to have his drawings exceed his income for a couple of years and help you out tax free

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