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Original poster

Family gift / investment confusion

7 replies

decemberbride · 08/08/2021 21:22

Ive been gifted some family money.

Ive agreed with my brother i will give him half this amount, once im able.

The money is tied up in the house i own.

Theres no rush to give him the money but im just quite conscious about it.

I was thinking, if i were to buy a flat which cost say 200k, the mortgage would be in my name but i would put us both as 50/50 joint owners.

Is this just essentially the same thing, because his money would still be tied up in property and therefore a stupid idea?

OP posts:

Gardenwalldilema · 08/08/2021 21:29

That would complicate things as he'd potentially get into a pickle with stamp duty etc should he want to move / buy a place etc.
Better to give him the cash as and when you can.

GU24Mum · 08/08/2021 21:37

Rather than make him a co-owner, a better thing would potentially be to give him a mortgage on the house (if you can put a second one on). But if your brother isn't pressing for it, do you need to do either at this stage?

AnotherOldGeezer · 08/08/2021 21:49

@Gardenwalldilema

That would complicate things as he'd potentially get into a pickle with stamp duty etc should he want to move / buy a place etc. Better to give him the cash as and when you can.

Absolutely

SleepingStandingUp · 08/08/2021 21:50

If the money isnt needed, do nothing. When you sell you know the situation. Until then, Or his needs change, i wouldn't complicate matters

2021Vision · 08/08/2021 21:54

If you have been gifted the money, why are you giving him half? Why were you gifted the money and not him?

If you buy a house and make him 50/50 owner he then benefits from 50% of any increase when presumably you are paying all the mortgage and bills.

Am I missing something here? if he wasn't gifted the money and you are giving it to him as some kind of gesture it is on your terms surely?!

BeeLady15 · 09/08/2021 01:02

I think you need to fully explain where the gift is coming from etc to get proper advice. For example, if you’re obliged to pay him out this amount after a period of time, he should be given this amount directly by the donor. You don’t want your CAT allowance used up unnecessarily.

maxelly · 09/08/2021 10:47

No I don't think that's a great idea - your brother still wouldn't have access to the cash, I don't think it will be possible to just have the mortgage in your name (even if you pay it 100%), if he is co-owner he will be jointly liable for the debt and if anything were to happen to you he could end up liable for the full amount. Plus he would be liable to pay tax on any income from the flat (I assume you would plan to rent it out?), plus potentially capital gains tax once sold. Also if he's never owned property before, he could lose first time buyer benefits if he already has a flat in his name. It all could get very messy.

If you really want to give him the cash asap, the simplest way would be to increase your borrowing against your own/residential property by remortgaging/extending your existing mortgage. Obviously this will cost you more in interest payments, so if your brother isn't in a rush then a payment plan where you agree to pay him whatever a month for however many months on a standing order would be better for you, although he then doesn't get the benefit of having access to the capital to invest as he chooses?

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