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Thank you for your question..
Any outstanding loan is a debt and it will form part of your estate for IHT purposes whereas a gift is deemed a potentially exempt transfer and seven years rule applies to the latter.
A loan in joint names (husband and wife) to your son would mean that 50% of outstanding sum would form part of each person's wealth for IHT purposes.
I am not clear what the intention is .. gift the money or give the sum as a loan.
The liablity to IHT would only materialise if the combined wealth was in excess of threshold for IHT (currently £325k each)
More information on inheritance tax and gifts can be found here
I hope this is helpful and answers your question.
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Thank you for your reply.
I am happy to express my views on the two questions now put..
1. There is no reason why you/the recipient of the loan should not consider a reducing term life insurance policy.. speak to and IFA and get some quotes.
2. I see no reason why you can't place a charge (maybe a second charge if your son is also having a mortgage). Your conveyancing solicitor would have to advise the main lender of your intention to have a second charge on this amount.
If there are no more issues, I will appreciate if you would kindly rate my service/accept the service I have provided before you leave the site, to ensure I get credited for it by Just Answer.
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