I am looking to buy a second home in York; my daughter lives with me and cannot afford her own home yet. If I pay the mortgage on my current home, when I move and allow my daughter to live here what would be the tax implications for both of us? Would not having to pay rent to me be seen as a benefit and thus affect her tax allowance? Apart from second home tax, what other liability would I have if I let her live rent-free? 

Arthur Weller replies:
Your daughter not having to pay rent would not be seen as a benefit for tax purposes, and thus would not affect her tax allowance. By 'second home tax' I presume you mean the extra 3% stamp duty land tax when you buy the second home. But this has nothing to do with allowing her to live rent free in your first home. There is no other tax liability for you in allowing her to live rent free.