Helping adult children to buy property

[iknowimlucky]

hoping for some advice.
We are a married couple both 57 years old with two adult children.
Eldest is in a long term relationship and is hoping to buy
Both her and her partner have stable professional jobs and have saved approx 30k as a deposit
Younger son has only just finished uni and is an entry level poorly paid job at the moment.
We have a house worth about 850k with a mortgage of around 200k tracker offset type mortgage.
We also own outright a flat which we currently rent out its value is about 200k
We both have reasonable pensions coming our way and our lump sums will pay off our mortgage with a bit not too much left over.
My question is this- I am keen to sell the flat and give the children the money to get onto the property ladder
My husband wants to increase our current mortgage and give our eldest child the 100k from this as he says our interest rate is so low. Can we just give this or would there be tax implications?
Youngest is not in a position yet to buy so we can sort him out later?
He is keen to keep the flat as he says it will help us in our retirement and the kids would inherit eventually
With my lump sum and his we could pay off the 100K we give our daughter.
My husband intends to keep working and believes he can save enough to give the youngest his share within a bout 3 years.
Is this a good course of action?
Are we being generous with amounts we do not actually have?
Any outside point of view would be really helpful

Well tbh my first concern is being fair.

By which I mean what you commit to your eldest you should be prepared to match (or rather ring fence now) for the younger.

Any course of action that potentially means that's not possible in the future needs to be carefully considered.

There's nothing like money to cause huge family rifts/resentment.

In your situation I'd strongly recommend you get professional financial advice.

You're talking about significant sums of money here that have the potential to be life changing not just to your children but to you and your DH.

No-one ever wants to think the worst but it very much sounds like all your plans are based on the sun still shining.

Circumstances can change in a heartbeat.

By way of a cautionary tale, my DF's friend gave his DS £250k to get on the property ladder and as a way of avoiding inheritance tax (based on the 7 year rule). Problem was he got married, divorced and property went to the wife. Yes it was home to their grandchildren (so I'm not suggesting it was inappropriate), but their DS will never see a penny of the money his parents gave him which was clearly not the intention at the time of the bequest.

What they could have done was buy 50% of his property so he had a better lifestyle but it would have remained their asset (the downside being IT).

This is why you need to speak with a professional to go through all the ramifications/scenarios in advance.

Sorry pressed sent too soon.

In upshot, yes I think you're playing with money you don't have - lump sums, dependency on future earnings, increased mortgage at a time you should be paying it off....

You'd be better off throwing money at your own mortgage or down sizing (in terms of the latter gifting some excess to the children of that's feasible).

It's laudable to help your children but tbh I think you need to have total financial stability (and a back plan/contingency) for yourselves in place first.

I would also consider making sure your children ringfence their deposit in case of a split later down the line otherwise they’ll lose half later

Find a financial advisor you trust. If you put your name on the deeds you will incur the 3% extra tax as you already own a property.

Once your own mortgage is payed off, then assist. You’re not in the right position yet.
Second the divorce potential, don’t chip in more than you can afford to loose.

The total amount of what you own sounds a lot when it's written down on paper but in reality it's not very much at all . I think you are over stretching and using money you should use to pay off your own mortgage . Get your selves debt free first then take another look , perhaps give a smaller amount but to both children , say £30 k each and not leave yourselves so stretched , then make the younger put this safely away as a deposit for the future

Take out an interest only mortgage on the rental property?

You release capital but you still get an income which will hopefully be greater than the mortgage?

Thankyou so much for your responses, we are keen to help them on their way.
Yes I did think about the amount getting divided between my daughter and her partner if they split up. A friend suggested we give the money to her as a loan with a legally binding contract.
Yes I think we do need some professional advice.
The pensions are available now btw but we both enjoy work so haven't yet taken them.
We do have life insurance and critical illness cover so when something dreadful comes along as it surely will we have made as much provision as we can - have had a lot of grim scenarios to realise things do go wrong very suddenly sometimes.

I have recently had this scenario as part of a gift.

The money given was reflected in the ownership of the house percentage wise between my partner and myself so that in the event of a split he only owns a % of the house. You could also go to a prenup but we didn't want to do that.

I will say my parent was debt free at the time and was making it even between siblings. She has then discussed adding further into trusts along the line to make things even between my brother and myself in the event of selling any other properties.

A friend suggested we give the money to her as a loan with a legally binding contract.

All funds for house buying have to be accounted for with solicitor/mortgage co. Ie where they come from. Money from parents have to have paperwork with it (a friend just given her DS some and she couldn’t believe the hoops she had to jump through). If the money is a loan, it could reduce the amount that your DD can borrow as it will be taken into consideration by mortgage company as a debt.

As others have said, better to give as a gift and then ensure your DD legally owns a higher % of the house in case they split up.

This side of it is a worry, especially once they marry, as DeRigueurMortis tale shows.

My young adult DC have an inheritance growing for a future house deposit. We are adding to it by drip feeding some of their annual ISA allowance from us (we have significant savings ourselves so it’s a way to pass some to them now and to save IHT if anything happened to us). Neither have a partner yet, but I do worry about the implications if they buy with someone. Hopefully they will both take advise to ensure their contribution is protected, but if they then marry, they could come out poorer.

Thankyou all for your replies quite sobering thoughts in there really
We are going to get some advice plus finalise figures etc and take it from there