Question:
Our son cannot pay his mortgage and has depression. To help him, we aim to pay off his mortgage and take ownership of his flat but give him, as parents would, a life tenancy if he wants it. What are the pitfalls for us?
Arthur Weller replies:
It may be a better idea for you to lend him the money to pay off the mortgage, but at the same time to obtain a first charge on the property (similar to a mortgage company) for the value of the loan. This would avoid any stamp duty land tax, since you are not buying from him. When he gets back on his feet, he can gradually pay the loan back to you.
