Parents came to us wanting to help their daughter buy her first flat. Their instinct was to gift her a larger deposit. Once we walked through the alternatives, they chose a different structure entirely: one where their income counted towards what she could borrow, without either of them appearing on the property’s title.
There is no single “family mortgage”
Several structures do quite different jobs here, and the right one depends on what the parents are prepared to give up, if anything, and for how long.
Joint Borrower, Sole Proprietor (JBSP). Typically a family member’s income is added to the mortgage application to boost affordability, but they are not on the property’s title. That matters: it allows the applicant who is on the title deeds and will be living at the property to benefit from any stamp duty allowances, and not to be subject to the additional-property stamp duty surcharge or the Capital Gains Tax exposure that would apply if the additional borrower were also on the title deeds and already owned their own home. The additional borrower never legally owns a share of the home.
Family offset or springboard mortgages. The parents’ savings sit in a linked account as security rather than being gifted outright, and are released back to them, usually after several years, once the loan-to-value has improved through repayment or house price growth.
Gifted deposits. Still the most common route. A gift needs a solicitor’s gifted deposit letter confirming there is no expectation of repayment, and a large gift can be relevant to Inheritance Tax if the giver dies within seven years. That is worth factoring in, given the nil-rate band has been frozen at £325,000 since 2009 and, following the Autumn Budget 2025, is currently set to remain frozen until April 2031.
| Joint Borrower, Sole Proprietor structures generally avoid both the 5% additional-property stamp duty surcharge and CGT exposure for the supporting family member, because they do not take a share of the property’s title (HMRC, SDLT and CGT guidance). Tax treatment depends on individual circumstances and should be confirmed with a solicitor or tax adviser. |
| NEEDS SIGN-OFF: The JBSP paragraph is the client’s compliance-reviewed wording, split into two sentences for readability with no change of meaning. Please have compliance confirm the split version before publishing. The callout box states a tax outcome and should be signed off at the same time. |
Why this needs planning, not just paperwork
Each of these routes changes something different: who is liable if payments are missed, whose name is on the deeds, how the arrangement interacts with the parents’ own future plans, and how long it is expected to last. None of that is obvious from a product name, and the differences only surface properly when someone runs the family’s actual circumstances through each option.
London FS talks families through which structure genuinely fits, rather than defaulting to whichever one comes up first in conversation. If you are thinking about helping a child buy, it is worth having that conversation before the deposit moves.
Sources: HMRC, gifts and Inheritance Tax guidance (nil-rate band £325,000, frozen until April 2031 following the Autumn Budget 2025); HMRC, Stamp Duty Land Tax higher rates guidance and Capital Gains Tax on residential property.
