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Gloommonger

Borrowing money

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We have just exchanged on a 3 bed semi which is ripe for a huge side and rear extension. Problem is we have no money! My wife's ex boss, loaded, said he would lend us the money to do the extension. At the moment it's a bit vague what he meant, but a figure of 90k was mentioned. Can he lend us this amount or will the taxman come knocking for his slice of pie? I'm sure it will come out of his inheritance tax, but he has no family. Will we be liable to pay tax in any way?

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2 minutes ago, Gloommonger said:

We have just exchanged on a 3 bed semi which is ripe for a huge side and rear extension. Problem is we have no money! My wife's ex boss, loaded, said he would lend us the money to do the extension. At the moment it's a bit vague what he meant, but a figure of 90k was mentioned. Can he lend us this amount or will the taxman come knocking for his slice of pie? I'm sure it will come out of his inheritance tax, but he has no family. Will we be liable to pay tax in any way?

Oh fuck. Don’t. See my thread on fucking builders. o.O  90kwill probably just cover it if you are lucky. Be prepared for a year living on a building site. 

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4 hours ago, One percent said:

Oh fuck. Don’t. See my thread on fucking builders. o.O  90kwill probably just cover it if you are lucky. Be prepared for a year living on a building site. 

Perhaps a bit more enthusiasm and it might have been done by now :D

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12 hours ago, One percent said:

Oh fuck. Don’t. See my thread on fucking builders. o.O  90kwill probably just cover it if you are lucky. Be prepared for a year living on a building site. 

😄 I have followed your thread with interest. No way could we move out so will have to cook and eat in the living room. I look forward to telling you about my wonderful builders and how it was all finished in 3 months and under budget 😂

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25 minutes ago, Gloommonger said:

😄 I have followed your thread with interest. No way could we move out so will have to cook and eat in the living room. I look forward to telling you about my wonderful builders and how it was all finished in 3 months and under budget 😂

xD  dream on.  I bet they don’t turn up two days straight. 

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Given teh vast amount of disruption tah this will bring to you why do you want to do it immediately?

If it's for financial gain - and this is a perfectly reasonable aim - why not sort out the planning permission and keep renewing it up to the point you want to do it or sell it with the planning permission.

As to borrowing as @One percent intimated these costs could go up.  What if they went up another £30k?

 

A cautionary tale:

Is this the biggest ever Grand Designs disaster? Man who’s spent ten years trying to build an art-deco lighthouse reveals he’s lost £4million and RUINED his marriage – and still needs £2million to finish it

  • Edward Short, 50, from Devon, dreamed of building a white art-deco lighthouse
  • He and wife Hazel were granted permission to build in 2010 and started in 2012
  • But the project turned into a nightmare as it proved impossible to finish
  • Edward and Hazel's marriage collapsed as a result of the strains of the build 
  • He reveals on Grand Designs he is now almost £4 million in debt from project  

https://www.dailymail.co.uk/femail/article-7556189/lauren-nicole.html

Also, and closer to home, my parents bought an immaculate house which had been entirely renovated.  The strain of the renovation had caused the couple who did it to split up hence it going up for sale.

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3 minutes ago, Frank Hovis said:

Given teh vast amount of disruption tah this will bring to you why do you want to do it immediately?

If it's for financial gain - and this is a perfectly reasonable aim - why not sort out the planning permission and keep renewing it up to the point you want to do it or sell it with the planning permission.

As to borrowing as @One percent intimated these costs could go up.  What if they went up another £30k?

 

A cautionary tale:

Is this the biggest ever Grand Designs disaster? Man who’s spent ten years trying to build an art-deco lighthouse reveals he’s lost £4million and RUINED his marriage – and still needs £2million to finish it

  • Edward Short, 50, from Devon, dreamed of building a white art-deco lighthouse
  • He and wife Hazel were granted permission to build in 2010 and started in 2012
  • But the project turned into a nightmare as it proved impossible to finish
  • Edward and Hazel's marriage collapsed as a result of the strains of the build 
  • He reveals on Grand Designs he is now almost £4 million in debt from project  

https://www.dailymail.co.uk/femail/article-7556189/lauren-nicole.html

Also, and closer to home, my parents bought an immaculate house which had been entirely renovated.  The strain of the renovation had caused the couple who did it to split up hence it going up for sale.

We wouldn't do it straight away, maybe start next Spring. Mrs G. wants the big fancy kitchen, I think doing the side extension first would be best with minimal disruption and we would know if we could afford the kitchen. 

My concern is can a non family member loan or gift a large amount of money without penalty for the borrower?

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4 minutes ago, Gloommonger said:

Do you mean if we draw up a contract?

Yes, you're getting a pro in to do the building work, so get a pro to knock a contract up.

Why people leave themselves open to the whims of trades when every other aspect of life is signed and documented, I don't know.

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7 minutes ago, Gloommonger said:

We wouldn't do it straight away, maybe start next Spring. Mrs G. wants the big fancy kitchen, I think doing the side extension first would be best with minimal disruption and we would know if we could afford the kitchen. 

My concern is can a non family member loan or gift a large amount of money without penalty for the borrower?

I’ve done my kitchen on the cheap (well as far as you can with rip off kitchens). I’ve spent around 14 k and not paid the chippy or put the floor down. O.o

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2 minutes ago, Gloommonger said:

We wouldn't do it straight away, maybe start next Spring. Mrs G. wants the big fancy kitchen, I think doing the side extension first would be best with minimal disruption and we would know if we could afford the kitchen. 

My concern is can a non family member loan or gift a large amount of money without penalty for the borrower?

Ah ok - no lecture required!

Simple answer: yes of course.

I don't think that not being a family member is relevant.  I loaned £100k to my parents about twenty years ago as they were buying another house before selling their own.

I drew up a full loan document (no lawyers involved) which we all signed and kept a copy.  There was no lack of trust but it was there in case something happened and I needed to evidence it my siblings who weren't told about the arrangement.

They paid me interest because I was losing it by lending it to them but this was just what I was already getting and a fraction of the cost of a loan; they paid me that in cash and paid me back the money when the house sold.

I would suggest drawing up that document to protect your wife's ex boss in case the two of you have an accident as it would mean his losing his £90k.

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4 hours ago, One percent said:

I’ve done my kitchen on the cheap (well as far as you can with rip off kitchens). I’ve spent around 14 k and not paid the chippy or put the floor down. O.o

14k fucking hell and there's me pulling my face over the price of curtains

Edited by stokiescum

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On 09/10/2019 at 18:15, Gloommonger said:

My wife's ex boss, loaded, said he would lend us the money to do the extension. At the moment it's a bit vague what he meant, but a figure of 90k was mentioned.

Uh, why would someone want to lend an ex employee 100k would be my question?

You may want to find out the terms O.o

Edited by afly

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😄😄 He is really not my type!

Now you mention it, Mrs G was suggesting I find myself a rich octogenarian to hook up with! Hope she isn't planning the same!😳

Just now, One percent said:

It’s fucking gorgeous though and all fitted appliances and granite worktops. O.o

Does it cook your breakfast better than the old one?😁

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3 minutes ago, Gloommonger said:

😄😄 He is really not my type!

Now you mention it, Mrs G was suggesting I find myself a rich octogenarian to hook up with! Hope she isn't planning the same!😳

Does it cook your breakfast better than the old one?😁

Yes. Look at the early pictures in my stealth thread an designer kitchens. 

They really are expensive. 

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11 hours ago, jm51 said:

One way to get a kitchen on the cheap is to buy all the units etc. yourself and get a tradesman in to fit them.

There are some real nice used kitchens on Ebay, some with appliances. Just need to collect and fit.

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On 11/10/2019 at 09:31, Frank Hovis said:

Also, and closer to home, my parents bought an immaculate house which had been entirely renovated.  The strain of the renovation had caused the couple who did it to split up hence it going up for sale.

It seems that you pay a fairly small premium for a house that is fully up to scratch vs one that needs renovating/extending, cant see why people bother unless they enjoy the process of fucking about with a house (which I dont).

Edited by goldbug9999

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On 11/10/2019 at 20:11, jm51 said:

One way to get a kitchen on the cheap is to buy all the units etc. yourself and get a tradesman in to fit them.

Are people incapable of drilling a few holes these days ?. 

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3 minutes ago, goldbug9999 said:

It seems that you pay a fairly small premium for a house that is fully up to scratch vs one that needs renovating/extending, cant see why people bother unless they enjoy the process of fucking about with a house (which I dont).

I can't speak for the whole market but down in Cornwall, possibly because of the number of retirees, there is a strong preference for a fully done house.

The return on the expenditure is roughly two to one if you can put up with the disruption.

If I move I will certainly be lashing out £30k for upgrades to add £60k to the price.

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On 09/10/2019 at 18:15, Gloommonger said:

We have just exchanged on a 3 bed semi which is ripe for a huge side and rear extension. Problem is we have no money! My wife's ex boss, loaded, said he would lend us the money to do the extension. At the moment it's a bit vague what he meant, but a figure of 90k was mentioned. Can he lend us this amount or will the taxman come knocking for his slice of pie? I'm sure it will come out of his inheritance tax, but he has no family. Will we be liable to pay tax in any way?

It's a loan not income, even if it's interest free. Absolutely no tax. He may want a second charge on the house ( ie. treat it is as a mortgage). 

If in due course it becomes a gift, the IHT liability will belong to his estate not you, I believe.

Edited by crashmonitor

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49 minutes ago, crashmonitor said:

It's a loan not income, even if it's interest free. Absolutely no tax. He may want a second charge on the house ( ie. treat it is as a mortgage). 

If in due course it becomes a gift, the IHT liability will belong to his estate not you, I believe.

Thanks Crashy, we get the keys tomorrow. Soon find out what his offer is. He's a lovely Jewish man, mid-sixties, no family and a dodgy ticker. He's fond of my wife as she is one of the few people who keeps in contact with him and takes an interest in his wellbeing. 

Note to @One percent and her stalker 😄

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