The objective

Our clients wanted to gift their son and daughter, aged 26 and 24, their first properties in London as they started their working lives. At the same time, they were keen to use this opportunity to help their children to develop financial skills and to start to take responsibility for an asset. They also wanted their children to contribute financially in some way.

How did we help?

Our Wealth Advisory and Lending specialists sat down with the family to discuss their aims and the ways they could achieve them. The idea that resonated most was for the parents to help with a deposit, while the children would contribute money from the inheritance left to them by their grandmother. They would also take full responsibility for owning and managing the property and meeting mortgage payments.

We helped the family draw up a budget for the property based on:

  • the parents contributing 85% of the cost as a down payment – this would be treated as a Potentially Exempt Transfer (PET) and the parent who made the gift to the children would need to live for seven years afterwards to avoid creating an Inheritance Tax charge upon their death;
  • the children contributing £100,000 from a gift they had each received from their grandmother’s estate two years ago;
  • the children meeting the mortgage payment with their own salaries, plus the rent paid by a tenant each if required; and
  • the parents agreeing to be mortgage guarantors.

We also discussed other ways real estate could help the family achieve their goals for their wealth. They were keen to buy a property in the South of France for them all to enjoy as a family now and in the years to come as a place to build memories together.

What happened next?

The children each found a flat costing around £2.7 million, and we provided them both with a £2 million mortgage. They were excited about the opportunity to have a home in London and to take on the responsibilities that come with owning a property. We also helped the family buy a property in the South of France for €20 million.