Tax and is there a way to do this legally

[lolacherricoke]

Question- if my parents were to pay a 50k deposit on a flat and then DH would then get a mtg for £200k. If my DPs then paid us rent monthly, what are the tax implications? Is there a way of doing this without my husband who is a higher rate tax payer not getting stung for a huge tax bill!! I work in a school and salary is below tax threshold. Any ideas on how we avoid a huge tax bill (legally) tia

Speak to a private financial advisor or an accountant 😊 there's several factors at play but your original post (obviously!) can't have all of the information, they'll be best placed to advise on any ways you can be tax efficient.

As PP said you need to get advice. Also think about stamp duty - we bought a place for MIL and ended up paying the additional rate

Do you need to charge them rent? We had a similar set up with DMum after my stepdad died. She gifted the deposit on a property and DH and I took out a BTL mortgage on the rest. Having seen a financial advisor, we decided against charging anything but a nominal rent (£1/month), so we don't pay any additional tax on rental income received. Obviously the downside is we have to pay the mortgage out of our own income, but the property is ours so I see it as a long term investment.

Who is living in this house?

Who is buying it?

Is the £50k a cash gift?

Why would they be paying you rent? (How much?)

Rental income is taxable. Depending on what you are actually doing (which isn't really clear to me) there are potentially other taxes in point, such as inheritance tax implications.

If you're doing anything complex then you need to pay for advice from a qualified tax adviser, don't rely on internet randoms.

https://taxaid.org.uk/guides/taxpayers/choosing-an-accountant-or-tax-adviser