Intergenerational Mortgage Advice
Property prices can make it difficult for younger buyers to purchase their first home without help from family. Parents and grandparents may therefore consider providing financial assistance. However, there is more to consider than simply providing a deposit.
How Can Parents Help Their Children Buy a Home Without Creating Problems Later?
Balancing family support with your own long-term financial security, tax exposure, and retirement plans ensures peace of mind for both generations.
How can parents help their children buy a property?
There are different ways a family might provide assistance. This could involve a gift, loan or another arrangement depending on the circumstances.
The important thing is to understand the financial and family implications before proceeding.
Could helping my children affect my own finances?
Yes.
Parents should consider whether they may need the money themselves later, particularly when planning for retirement or potential care costs.
Could a gift affect inheritance tax?
Potentially.
Significant gifts can have implications for estate planning and should therefore be considered as part of the wider family financial position.
What happens if circumstances change?
Family circumstances can change. Marriage, divorce, relationship breakdown, death or financial difficulty can all affect an arrangement that originally seemed straightforward.
Taking advice before making a significant family financial commitment can help identify potential issues.
Important Regulatory & Risk Notice:
Your home (or the borrower’s home) may be repossessed if repayments are not kept up on a mortgage secured against it.
Gifts to family members are subject to HM Revenue & Customs (HMRC) Inheritance Tax rules, including the 7-year Potentially Exempt Transfer (PET) guidelines. Capital limits and local authority rules regarding care fees may also apply. Corcillium Wealth Management is authorised and regulated by the Financial Conduct Authority (FCA).
Considering Helping a Family Member Buy a Property?
If you are considering helping a child or family member buy a property, contact Corcillium Wealth Management to discuss the wider financial picture.
Arrange a Conversation