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Where Taxpayers and Advisers Meet

Borrowing from Children/Grandchildren to buy House

bozzle
Posts: 18
Joined: Wed Aug 06, 2008 3:52 pm

Borrowing from Children/Grandchildren to buy House

Postby bozzle » Thu May 02, 2019 5:56 pm

Hi,
I am now retired and my wife and I have over £2m of assets, good pensions and we have already gifted money to our children and grandchildren who also have property, secure incomes and substantial savings. We are looking at buying a second house to downsize too in a few years and our family are happy to lend us money at no interest to fund this. Am I correct in thinking that if the loans were formally recorded and ongoing they could be offset against our estate at death for CGT purposes.

Any advice would be much appreciated

bd6759
Posts: 3094
Joined: Sat Feb 01, 2014 3:26 pm

Re: Borrowing from Children/Grandchildren to buy House

Postby bd6759 » Thu May 02, 2019 8:31 pm

Death is not a chargeable occasion for CGT.

bozzle
Posts: 18
Joined: Wed Aug 06, 2008 3:52 pm

Re: Borrowing from Children/Grandchildren to buy House

Postby bozzle » Thu May 02, 2019 11:07 pm

Sorry, meant for IHT purposes

maths
Posts: 7550
Joined: Wed Aug 06, 2008 3:25 pm

Re: Borrowing from Children/Grandchildren to buy House

Postby maths » Thu May 02, 2019 11:13 pm

Assuming the loans are arm's length and contain normal terms then on death any such liability (on repayment) would be deductible for IHT.

maths
Posts: 7550
Joined: Wed Aug 06, 2008 3:25 pm

Re: Borrowing from Children/Grandchildren to buy House

Postby maths » Thu May 02, 2019 11:14 pm

No need to charge interest.

AGoodman
Posts: 827
Joined: Fri May 16, 2014 3:47 pm

Re: Borrowing from Children/Grandchildren to buy House

Postby AGoodman » Wed May 08, 2019 10:47 am

But why the need to borrow money if you are downsizing. If you are giving them the money they lend to you then different rules apply and you may not get the deduction (cf s.103 Finance Act 1986)


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