Hi All

I gifted my son the equity in my house for him to get on the property ladder, who pays this new indemnity policy forced to take out by lenders as we have both been charged for it, seems unbelievable i have to take out an policy to protect my sons lender, thanks in advance

can you elaborate your brief post a bit

what exactly is the indemnity for

I should imagine it is to protect the lender

If the person gifting the money dies within 7 years there could be inheritence tax problems, Or if the gifter is declared bankrupt, Or even if he wants the money back some day

there could be inheritence tax problems,

i did think of that re iht (ie 'gift' being mentioned, it being over 1k),

but an indemnity can be for various reasons, as you say.

thanks for replies details as follows:

i sold my house to my son and gifted him the equity £50k i received bill from solicitor and i have had to pay Indemnity insurance arrangement fee £105 my point being my son was also charged the same The policy is basically to protect the lender should i go bankrupt. my question is do i pay to protect my sons lender or should my son? surely not both of us

The insurance itself would seem pointless, But if the lender is insisting on it being paid, I can't see there is much you can do

If you refuse they could withdraw the mortgage offer

it seems commonplace in such circs re a gifted deposit to cover it if happens to be required to be paid back in the future. (maybe not relevant, but i see from one of your threads you were in a 'bankruptcy' issue that ended up not so)

who pays? - the seller (person gifting) foremost i wld think.

maybe dispute it, as duplicate?

ok thanks for help, yes finally sorted bankruptcy thing paid £10k debt in one go, now son bought house with all equity and im as free as a bird, RELIEF

Are you certain the policy your son is being asked to pay for is for the same thing as you are being asked to pay for? Could the lender being asking your son to pay for a policy that covers something entirely different?

This article suggests that Gifted Deposit Indemnity Insurance if required is paid for by the purchaser, ie your son.

https://thinkinglegally.wordpress.com/2015/04/28/gifted-deposit-indemnity-insurance-costly-unnecessary-for-homebuyers/

i had read one which suggested maybe the vendor. but it does seem to be a general bone of contention re who pays (maybe as its family, split the cost for one if the same ), and whether needed or not if there's no current circs to justify.

As OP was/is subject to bankruptcy, had thought maybe thats why one was wanted.

as you pose, do they cover the same

i had read one which suggested maybe the vendor. but it does seem to be a general bone of contention re who pays (maybe as its family, split the cost for one if the same ), and whether needed or not if there's no current circs to justify.

In this specific case the person making the Gifted Deposit is also the Vendor, which is an unusual situation. Usually the Vendor has nothing to do with the the Gifted Deposit so I can't imagine they'd be willing to pay the cost of the Gifted Deposit Indemnity Insurance. Venodr would surely insist purchaser pays as the potential risk arises solely because of the way the purchaser is funding their purchase.

It would be different if the Indemnity Insurance was needed because of something the vendor had done - eg breach of covenant - or something connected with the property itself - Chancel Liability, Missing Document Indemnity. Vendor could reasonably be expected to pay for those.

It would be different if the Indemnity Insurance was needed because of something the vendor had done

thats what i mentioned, re the bankruptcy.

a couple of the articles read re

https://www.simpsonmillar.co.uk/news/indemnity-insurance-for-first-time-buyers-2986

http://solicitorsnews.blogspot.co.uk/2016/04/are-conveyancers-over-charging-on-mum.html