Areas of Law / Divorce and Family

When my son married, his father-in-law gave the couple £35,000 as a down payment on their house. Now they’re having matrimonial difficulties the father is saying the gift was in fact an interest-free loan. Surely if it was a loan it should have been declared on the mortgage application form?

If the couple were to divorce and fall out about this money, then the mortgage application form may help your son argue that the money was a gift, and that (assuming the property is in joint names) he was entitled to half the proceeds. However a court could divide the property differently, especially if the marriage was a short one but generally the courts regard transfers of money between parents and children as gifts unless there is firm evidence to the contrary.

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