Gifting a large deposit to daughter

Srapita · 2023-12-25T09:26:11+00:00

Has anyone done something similar to this? Our only dc lives with her boyfriend of five years. They’ve lived together for three. He’s a lovely man. They’re late 20s. We want to help dd get on the housing ladder and were thinking of giving her an early inheritance. We’d be able to give her around £250k by selling a property we own. Dd and her boyfriend are looking to buy together and this could be a sizeable deposit to bring down the monthly repayments. We were thinking of getting a lawyer to draw up something that protects this money as dd’s incase of a break up. This way they can buy a 2-3 bedroom house in an ok area of London.

HowDoYouFeel · 25/12/2023 09:28

My parents did something similar for us 15+ years ago to help us get on the property ladder.

They drew up a deed of trust with their solicitor. It was all very straightforward.

RandomMess · 25/12/2023 09:28

If they marry then that could well impact any ring fencing of the deposit. You need proper legal advice and also speak to your DD and ask how she feels about the gift being conditional on it being ringfenced.

Octavia64 · 25/12/2023 09:30

I have done this.

My DS was not in a relationship shop though so it was his alone, so can't advise on protecting it.

He was very appreciative.

ChanelNo19EDT · 25/12/2023 09:32

I'd giveva smaller deposit right now, enough to help, but not enough that you could all end up feeling robbed if they split up. Hold on to the rest. Maybe buy a one bed in your own names and rent it out. I'd see how good of a father he is first before giving them 250k. See if they survive parenthood as a couple first. I might sound terribly cynical but there you go.

Soontobe60 · 25/12/2023 09:39

If thay own it as tenants in common that protects her share, but if they marry then subsequently divorce the whole property would be considered as joint.

colourfulchinadolls · 25/12/2023 09:41

ChanelNo19EDT · 25/12/2023 09:32

I'd giveva smaller deposit right now, enough to help, but not enough that you could all end up feeling robbed if they split up. Hold on to the rest. Maybe buy a one bed in your own names and rent it out. I'd see how good of a father he is first before giving them 250k. See if they survive parenthood as a couple first. I might sound terribly cynical but there you go.

Why have you assumed they want children/plan to have them?

Toooldtoworry · 25/12/2023 09:44

Tenants in common and a deed of trust. Before confirming seek advice of a solicitor, but I suspect that's the way they'd advise her to go.

Outliers · 25/12/2023 09:47

If its in a house that's jointly owned, nothing can protect it. Especially if they get married.

I could be wrong but that's my understanding.

Unless there's a prenuptial agreement even then that's not legally binding in UK.

MrsPatrickDempsey · 25/12/2023 09:49

My friend did exactly this and their contribution was ring fenced and protected legally for their daughter who is married.

MarieG10 · 25/12/2023 09:50

Need seriously good advice for something that would endure in marriage which might be trust arrangements. Two people in my family have been gifted large amounts of money for a house to then have the spouse walk off with it in entirety based on "need". Awful. The third has been given money but it was protected by trust arrangement so even if they divorce as now married it is protected.

Menomeno · 25/12/2023 09:52

It’s quite routine. We have just gifted a 25% deposit to DS. The solicitor has drawn up a deed of trust that states in the event of them splitting up, he will get 25% of the value of the house back, and the remaining 75% will be split equally. What shocked me was the cost of this document - it was about £500 just for this, but it’s worth it for the peace of mind.

caringcarer · 25/12/2023 10:08

I gifted my DS £55k for deposit but he's buying on his own and had already saved a good chunk for deposit. What I did do was adjust my will to reflect he'd had some of his inheritance early, so to make it fair on other 2 DC.

Ottersfortea · 25/12/2023 10:11

Some lenders allow a parent to put a charge on the property. Not all lenders allow it but I would explore that too.

Rocknrollstar · 25/12/2023 10:27

You need to do with this a solicitor to ringfence the money otherwise if they split up, he will get half. We know people who have lost a lot of money like this. Otherwise it’s a lovely idea if you can afford it

Twiglets1 · 25/12/2023 10:54

I did this for my daughter to enable her to buy a flat in London. She wasn’t in a relationship though so we didn’t have that complication. You will need to get legal advice as to how to protect the money in the event that the couple separate.

Nonewclothes2024 · 25/12/2023 12:01

ChanelNo19EDT · 25/12/2023 09:32

I'd giveva smaller deposit right now, enough to help, but not enough that you could all end up feeling robbed if they split up. Hold on to the rest. Maybe buy a one bed in your own names and rent it out. I'd see how good of a father he is first before giving them 250k. See if they survive parenthood as a couple first. I might sound terribly cynical but there you go.

Who's mentioned children ?

Fretfulmum · 25/12/2023 21:03

If it were my DD, I would gift the deposit to her and she should buy a property herself in her name only. Her partner can pay “rent” to her for living there. There is no need for them to buy together if it’s her inheritance. Obviously things will change when or if they get married/have children so she can address that then.

cimena · 25/12/2023 22:33

Better safe than sorry but not everyone’s a dick. We had a deposit from DHs parents and it’s well understood that if we split that would go back to him, but there’s nothing legal in place about it. No kids though - if there were then that might change things in the sense of needing two houses for them to live in, but in a sense that would keep the deposit ‘intact’ in that the results of it would end up with them anyway.

Do consider whether you want a share of any increase in value on the property though…

Sunflowergirl1 · 25/12/2023 23:17

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PizzaPastaWine · 25/12/2023 23:28

Fretfulmum · 25/12/2023 21:03

If it were my DD, I would gift the deposit to her and she should buy a property herself in her name only. Her partner can pay “rent” to her for living there. There is no need for them to buy together if it’s her inheritance. Obviously things will change when or if they get married/have children so she can address that then.

What about the poor guy that might want to get on the property ladder and build assets for himself too? This doesn't seem fair.

I would gift the deposit only and ring-fence that legally.

DrySherry · 26/12/2023 08:38

Protecting the investment for your child is not so straightforward if circumstances change. You need proper legal advice on this. If they Marry for example or have a dc it gets complicated. If her partner makes a significant contribution to mortgage or running costs over an extended period it can also be legally difficult.
Have you thought about gifting the deposit to them both ? This keeps a more balanced dynamic in the relationship rather than one always feeling they have a more powerful position than the other ? You seem to like him a lot and feel he is suitable.

TizerorFizz · 26/12/2023 09:00

We gifted exactly this amount but DD was singke . She then had a live in boyfriend who who did not contribute to the mortgage. Deliberately. Nothing was his but he owned a flat elsewhere. She’s a family lawyer and says there are ways deposits can be ring fenced and house ownership varied to reflect the money put in. So take legal advice.

Also, when you give, make it clear it’s a gift. Not a loan. Mortgage companies won’t want to see another loan! They also will ask about where the money came from. For IHT planning it needs to be a gift 7 years before you die.

Daisies12 · 26/12/2023 09:03

We had this from my dad. I owned a larger share of the property, to protect it. Make sure your DD discusses this with her partner early on

Twiglets1 · 26/12/2023 10:50

TizerorFizz · 26/12/2023 09:00

We gifted exactly this amount but DD was singke . She then had a live in boyfriend who who did not contribute to the mortgage. Deliberately. Nothing was his but he owned a flat elsewhere. She’s a family lawyer and says there are ways deposits can be ring fenced and house ownership varied to reflect the money put in. So take legal advice.

Also, when you give, make it clear it’s a gift. Not a loan. Mortgage companies won’t want to see another loan! They also will ask about where the money came from. For IHT planning it needs to be a gift 7 years before you die.

Yes, our daughter’s solicitor made us sign a letter confirming the money was a gift not a loan which she presumably shared with the mortgage company. We also had to provide evidence of where our money came from ( anti money laundering regulations).