Funds From Mum & Dad – Was It A Gift Or A Loan?

In the current financial climate, it is harder than ever for young people to purchase their first home. It is increasingly the case that funds are advanced by a parent to give a helping hand to their children.

By law, funds advanced by a parent to children is presumed to be a gift, under the doctrine of the 'presumption of advancement'.

It is not uncommon, however, when parties separate, that parents demand a return of the funds they advanced, to ensure the funds are not taken by their former son or daughter-in-law. When this occurs, parents are often surprised to be advised about the "presumption of advancement" and that their funds will not likely be required to be repaid.