Helping My Nephew Buy A House?

[paddy11]

long story...looked after my nephew after his parents died. Now want to help with dep for a house/flat for him and girlfriend...am under impression you can only 'gift' a certain amount (3,000 per annum) so why do I then read about parents who, in these tricky times,use their savings to help their offspring? I have approx £18,000 (hard earned, believe me!) that I could put towards a dep...but I don't get how this works?! Could it be classed as a loan? Would I then have to prove repayments from him to me?? I know I should see solic. but any thoughts much appreciated. TIA Paddy

[Barmaid]

£3k is only relevant for inheritance tax. You can give away up to £3k per annum and no IHT is chargeable. This is only an issue if you die within 7 years.

You could do a straightforward gift. Or you could have a declaration of trust that you own a percentage of the property (eg if the property is £100k and you stick in £10k percentage is 10%) - this would at least provide a little protection for him against any partner he takes up with later. You could also set it up as a loan with repayments due at £3,000 per annum which you then "forgive". there are lots of avenues to consider but you do need legal advice.