Are your children agreeable to this? Would the person who left the money to them be happy that this was the outcome of their bequest? Just playing Devil's Advocate.
College is what I am thinking of... they would have either somewhere to live, or else a source of income to help pay for college. Just wondering what the tax considerations are.Kids, let me explain negative equity to you..... ya I know I broke all the rules
- don't invest in a high risk asset
- don't borrow to invest
- diversify your investment to reduce risk..
Etc
What about college? Dad? Well eventually the market will rise and then...
Why not buy iRes?
Or invest in a globally diversified portfolio?
Because you cannot take advantage of leverage.
Because you are depending on the competence of managers
Because you have to pay those managers for their efforts
Because you have to trust those managers not to pay themselves excessively for their efforts.
That is what I was thinking... as far as advice... would that be from an accountant, or FA, or bank?If you decide to go ahead and family considerations are not an issue, you should probably put the entire thing in the kids names. Any money you put toward it could be a loan from you to them. This would be difficult with the mortgage, but I know of someone who found a bank to go with it. You may need your name on the mortgage though not on the deeds.
The advantages are, the kids pay tax on the income, so they get tax credits and lower rate band. Whereas you would be taxed on your marginal rate.
Second advantage is that there would be no inheritance tax. It used be possible to transfer a second property to a child free of inheritance tax if the child lived in it for a period. This was recently abolished.
You would need good advice, specific to your circumstances.
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