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IHT: Helping the kids with their mortgages?

Shared from Tax Insider: IHT: Helping the kids with their mortgages?
By Mark McLaughlin, February 2024

Mark McLaughlin looks at some inheritance tax points to consider for parents wishing to help adult offspring manage their mortgage debts. 

These are difficult times for most young people buying their first home, or for recent first-time buyers trying to keep up with their mortgage payments. Some offspring will need help from their parents to get (or stay) on the property ladder. 

Cash lump sum  

With some thought and planning, it can be possible for parents to help adult offspring in an inheritance tax (IHT) efficient manner.  

The most obvious way would be to give the children a lump sum to pay off all or part of the mortgage. A cash gift is a potentially exempt transfer (PET) for IHT purposes, which becomes exempt if the parent donor survives at least seven years. 

Funding mortgage repayments <>

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