Lootman wrote:Dod101 wrote:I think we are all getting a bit pedantic. As long as their is no condition attached to the gift (as in, I attach a cheque for £100,000 but it is given to you for the express purpose of buying a property) That I suspect is a gift with reservations and would not pass muster.
If on the other hand you say,'I attach a cheque for £100,000. I would prefer that you use it as a deposit for that house you mentioned but it is of course up to you what you do with it.' I think that would be fine.
The other extreme is of course to say 'As I am now getting on a bit and you are just beginning to make your way in the world, I am attaching a cheque for £100,000 to help you on your way. Please use it as you see fit' That is clearly fine.
In the case of my kids, their mortgage lender required a letter from me stating (something like) "This transfer is an unconditional gift made for the purpose of purchasing a property".
So even if there is nothing else in writing, there is likely to be that documented statement that could be looked at.
All that said, it seems the main problem arises when parents donate their own home to their kids and then keep living there. As long as it is a cash gift used to buy another property or asset, and you derive no benefit from that asset, then I would have to believe that it works as a PET under current rules.
I agree. The essence is that the donor cannot have his cake and eat it.
Dod