My parents have rented a council house for many many years. They are eligible to buy it at a discount but haven’t the means and are too old to apply for a mortgage. My partner and I are soon going to remortgage and have a decent amount of equity in our house. We are thinking of gifting them the money to buy the house outright (under £50k) and them adding us in their will to inherit the house (we deeply treasure our parents and are in absolutely no rush for the inevitable to happen!). My question really is about the legalities of this, and any tax implications this would cause either party at any stage of the process. Parents are retired and aren’t well-off.
Beverley, my advice would be to avoid an outright gift of the money and instead lend it to your parents interest free and secured by way of a simple charge over their house. This keeps the value with you and avoids any potential complications on their passing if there were any other claims on their estate and when you inherit you can discharge the loan. A simple short form loan agreement and charge is all that you would need by way of documentation and a local solicitor could deal with this for you and register the charge.