20th November 2023
It is very common these days for parents and grandparents to loan money to their children and grandchildren to help them get on the property ladder or to improve their home.
Family arrangements are often done as a gentleman’s agreement with no documentation. But what happens if your child’s relationship breaks down? Will your child’s partner claim it as a gift? How safe is your investment and will you ever see it again?
In short, no formal footing makes it very difficult to guarantee your money will be returned to you in the event that their relationship fails. Make sure your investment or loan to your child is dealt with properly by considering these golden rules before handing over any money:
It is also important bear in mind that there are special rules that relate to a marital home on the breakdown of a relationship particularly where children are involved and therefore it is important that you take comprehensive legal advice at the time the money is loaned to ensure that there are safeguards in place.