Ben said:
@Kai
That pension story sounds like she’s trying to avoid extra taxes by deferring withdrawal till April. Seems a bit fishy if you ask me.
Tell your relative to wait till April then, so she can just use her own money.
@Kai
If she’s that confident about her funds, tell her to get a short-term loan from a broker.
@Kai
If she hasn’t accessed it yet, some pensions allow a 25% tax-free withdrawal. Just a thought.
@Kai
Why would someone in their 70s need a bigger place?
Clarke said:
@Kai
Why would someone in their 70s need a bigger place?
People will do what they want, I guess.
@Kai
Yeah, why buy a whole other property for more space at that age?
@Kai
They could try something like equity release or just skip buying it altogether.
Is she using a mortgage for the rest of the property? This usually doesn’t end well when family loans are involved. If it’s a gift, fine, but if not, it could ruin things.
Bela said:
Is she using a mortgage for the rest of the property? This usually doesn’t end well when family loans are involved. If it’s a gift, fine, but if not, it could ruin things.
She owns the first house outright and wants to buy the second the same way, but is short on cash. My info’s a bit second-hand.
As for it being a gift, my relative could handle the loss, but it’d be better if they could recover it.
The idea was that they could recoup the amount when the property eventually sells, assuming both live long enough. Both of them are in their 70s, so it’s a bit messy.
@Kai
If the niece could have gotten a loan herself, she probably would’ve by now. That pension story doesn’t sound right.
Bela said:
@Kai
If the niece could have gotten a loan herself, she probably would’ve by now. That pension story doesn’t sound right.
Exactly. If she could’ve gotten a small mortgage, I think she would have. And yeah, that pension story with the ‘tax’ excuse sounds weird.
@Kai
The bank won’t give a mortgage, and there’s usually a good reason. Anyone lending where a bank won’t is probably ignoring important red flags.
Best way is to just not do it.
If you mean safely loaning money with some guarantee, you could attach a legal charge to her property, but if she owns it outright, maybe she should just go to a bank.
Cassian said:
If you mean safely loaning money with some guarantee, you could attach a legal charge to her property, but if she owns it outright, maybe she should just go to a bank.
A charge could help, but will the elderly relative get the money back in time to benefit from it?
@Aki
If a charge specifies a repayment date, then yeah, the estate would hold the debt if something happens to the lender.
If she doesn’t have £30k now, she likely doesn’t have the cash to combine two houses into one. And at their age, this sounds like a huge waste of money.
CollinGreen said:
If she doesn’t have £30k now, she likely doesn’t have the cash to combine two houses into one. And at their age, this sounds like a huge waste of money.
Yeah, feels like a weird move for someone in their 70s. If she doesn’t have the 30k, how’s she going to afford combining the houses?
CollinGreen said:
If she doesn’t have £30k now, she likely doesn’t have the cash to combine two houses into one. And at their age, this sounds like a huge waste of money.
Maybe it’s not an investment but more about avoiding new neighbors. Or maybe they’re moving money into a non-taxable asset?
You could try a £30k lien on her property with a deed of trust for security.