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Tenants in common

vale49ers
vale49ers Posts: 1 Newbie
in House buying, renting & selling
Can anyone give me an answer to this question I have about tenants in common. Basically me and my partner are splitting up and are joint tenants. She doesn't want any money (equity) as when we purchased the house I paid £54,500 for our house using inheritance money and our house cost £218,000. I have spoken to the mortgage company who have advised me I don't earn enough to have the mortgage in my sole name and its fixed for the next 4 years. My partner is happy to stay on the mortgage so that the property does not have to be sold. She is also due an inheritance soon where she will be able to buy a property out right. Basically I need to change deeds to tenants in common and wanted to see if I could own 99% and my partner could own 1% as she doesn't want any money and I cannot transfer into my sole name due to not being able to get a mortgage on my own.


Any advice would be greatly appreciated


Thanks


Tom

Comments

  • TBagpuss
    TBagpuss Posts: 11,199 Forumite
    First Post First Anniversary Name Dropper
    Yes, you can do that. You would need to get a declaration of trust drawn up stating the % interest you each have, and also do a notice of severance of joint tenancy. It would be sensible then to register both with the Land Registry.

    Speak to a solicitor to get the documents drawn up
    All posts are my personal opinion, not formal advice Always get proper, professional advice (particularly about anything legal!)
  • Tom99
    Tom99 Posts: 5,371 Forumite
    First Post First Anniversary
    [FONT=Verdana, sans-serif]Its also in your ex partners interest to get this sorted otherwise they will be liable for 3% extra stamp duty on their own purchase.[/FONT]
  • gettingtheresometime
    gettingtheresometime Posts: 6,911 Forumite
    First Anniversary Name Dropper First Post I've been Money Tipped!
    Tom99 wrote: »
    [FONT=Verdana, sans-serif]Its also in your ex partners interest to get this sorted otherwise they will be liable for 3% extra stamp duty on their own purchase.[/FONT]

    And when this penny drops, I think her attitude may change.


    Whilst at the moment she's happy to let things stand as they are, when she realises that she'll be liable for this extra stamp duty, I bet any money she'll push for the house to be sold.
  • Tom99
    Tom99 Posts: 5,371 Forumite
    First Post First Anniversary
    gettingtheresometime wrote: »
    And when this penny drops, I think her attitude may change.


    Whilst at the moment she's happy to let things stand as they are, when she realises that she'll be liable for this extra stamp duty, I bet any money she'll push for the house to be sold.

    [FONT=Verdana, sans-serif]The house does not need to be sold, she can still be a legal owner as long as her interest is worth less than £40,000 which I assume a 1% interest would be.[/FONT]
    [FONT=Verdana, sans-serif]I think a 100%/0% interest would be better rather than a 1%[/FONT]
  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    If the property is now worth, say,£250,000, then 1% is 25,000 which is well below the £40K threshold for the Additional SDLT.

    But there might be other factors forher to consider eg eligibility forFTB mortgage, or, indeed, any mortgage eligibility due tto buying a 2nd property.

    She should speak to a mortage adviser.

    But from your point of view, yes, you can do as you plan. Bearing in mind that you continue to be dependant on her eg if/when you want to sell, or remortgage, or add your new partner to the Title in future.
  • Tom99
    Tom99 Posts: 5,371 Forumite
    First Post First Anniversary
    I would go for 0%/100% its cleaner and although 1% does not sound much you might end up having to hand over £1,000+ at some future point.
  • SDLT_Geek
    SDLT_Geek Posts: 2,491 Forumite
    First Anniversary First Post Name Dropper
    You need to keep an eye on SDLT as well. If your partner agrees to transfer to you a 49% share or a 50% share in the property then you are acquiring a property interest. Whilst you are not proposing to pay her any cash there is still likely to be chargeable consideration of a proportion of the mortgage debt (I expect you will agree with her to cover the mortgage repayments).


    Say the mortgage debt is £160,000. The chargeable consideration is likely to be £80,000. See FA03/Sch4/para8 especially 8(1C).

    If this is your only property then there should be no SDLT to pay, but a return will be needed. If you have other properties then SDLT might be due at 3%.
  • agrinnall
    agrinnall Posts: 23,344 Forumite
    First Post Combo Breaker
    If you can't get a mortgage on your own then rather than messing about as you describe a better solution would be to sell the property and buy one that you can afford/get a mortgage for.
This discussion has been closed.
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