My husband and I would like to lend enough money to our daughter and son-in-law to buy a house at auction next month. They have a house to sell but this will take several weeks/a few months even if they found a buyer tomorrow. When they do sell it, they will repay us about two-thirds of what we’ve lent them, and the remainder will be a gift. Apart from possible inheritance tax implications in the giving of a cash gift, which we’re aware of, are there any other pitfalls that haven’t occurred to us? Originally we thought we’d buy the new property and then sell it to them when they’d sold their existing house, but that would mean two lots of solicitor’s fees and stamp duty, and possible capital gains tax for us. So it would seem easier for us to just give them the money to buy it themselves. They are completely trustworthy and we have no worries about them repaying what they’ve agreed.

I’m afraid that this is really a question for a solicitor, not a personal financial planner. Although the scope of a financial planner is very broad (comprehensive planning including pensions, investments, insurance, mortgages, IHT planning, tax planning etc and so on) there comes a point where on the tax planning side of things an accountant is the right point of contact and on the estate planning and property purchase side, a solicitor is much more appropriate. I’d be inclined to call a couple of local solicitors and see if they can give you some input on this.

About our Resident Financial Expert

Jason Witcombe (pictured) APFS, CFPCM is a Chartered Financial Planner at Evolve Financial Planning. He has been awarded prestigious Chartered Financial Planner status, a qualification that only around 900 of the UK’s 65,000 qualified advisers have attained. He is also a Certified Financial Planner and is an Associate of the Personal Finance Society. www.evolvefp.com

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