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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3614
Experience:  Solicitors 2 years plus PQE
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My husband has been made bankrupt in 2011. We are now

Customer Question

Hi,
My husband has been made bankrupt in 2011. We are now in a position to buy a property however will be in my name because of his bankruptcy. My husbands mother has offered to help with the deposit and because of my husbands bankruptcy she has been advised to give him the money by putting it in trust, and has been told that he will be able to,use this money to put down a deposit. When my husband dies the money is left to his child from his first marriage.
I have been offered a mortgage by Santander who states on their terms and conditions that the deposit is not able to come from a trust? Can you please advise me with what to do?
Can she get rid of the trust and gift the money to me as a loan? I am her daughter in law and I can't seem to find anywhere on the internet if that is allowed, only blood relatives can gift a deposit
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Hi
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
She can gift you the money this is not a problem, the issue is whether you have to pay tax on it. Will her gifting you this money affect her standard of leaving i.e can she afford to give you the gift?
Kind regards
AJ
Customer: replied 1 year ago.
She is able to gift the money, as she has sold her house. She has left £100,000 in trust for my husband which she wrote out a cheque for him and is now sitting in his bank account
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
To avoid any uncertainty, if you are sure she is financially sounds, you could just get her or your husband to lend you the money on non commercial unsecured terms (i.e no interest or repayment date). This would avoid any concerns regarding tax, and would not necessarily be obliged to disclose the loan document to the bank, but would have it available if HMRC ever investigated the transaction.
Kind regards
AJ
Customer: replied 1 year ago.
Hi, if my husband is not going to be on the mortgage but is loaning me the money for deposit, the bank will need him to be on the mortgage? I'm not sure I understand how this will work.
Customer: replied 1 year ago.
I am waiting for a reply to my last question?
Expert:  Alex J. replied 1 year ago.
Hi
Thank you
As an arrange to avoid the arrangement attracting any form of tax your husband could lend you the money on terms that are not commercial (i.e are not repayable on demand and does not attract interest). Your husband would not have to sign the mortgage, and you would not be required to tell the bank that this is where you are getting the deposit from per say. You would only have to disclose to the bank the full arrangement if you were going to give your husband security (i,e a charge for the loan).
As long as how you receive the money does not prejudice the bank and its security you are not obliged to tell the bank full details of your financial affairs.
Kind regards
AJ
Alex J., Solicitor
Category: Law
Satisfied Customers: 3614
Experience: Solicitors 2 years plus PQE
Alex J. and 2 other Law Specialists are ready to help you
Customer: replied 1 year ago.
Hi thanks for that, however there are stricter lending criteria at the moment as the bank who is lending me the money state on their terms and conditions that they will check to see where the deposit came from, and as my husband has the money in his savings account it still belongs to a trust. The lender does not accept deposit as a gift or money from a deed of trust.mthis is why the confusion as to what to do?

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