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  • FIRST POST
    • spidermoney
    • By spidermoney 12th Oct 16, 1:01 PM
    • 4Posts
    • 0Thanks
    spidermoney
    Advice please
    • #1
    • 12th Oct 16, 1:01 PM
    Advice please 12th Oct 16 at 1:01 PM
    Hi



    Hope its in the right forum .

    My mother in law got divorced 9 years ago now & wasnt in the best place money wise so i helped her buy out her ex husband and we got a joint mortgage.
    She paid the majority of it and i helped out with the rest.
    Shes now retired and we were having problems with one thing or the other about getting a remortgage with her on it (due to her ex having black marks on borrowing etc.)

    So to cut a long story short the house is now in my name and mortgaged in my name, we still have the same agreement of her paying the majority of the mortgage and i also help out.

    Heres the BIG qustion i need answered .....Am i breaking any laws ?

    Any advice will be truley helpful .

    Thanks
Page 1
    • SavingSteve
    • By SavingSteve 12th Oct 16, 1:09 PM
    • 476 Posts
    • 205 Thanks
    SavingSteve
    • #2
    • 12th Oct 16, 1:09 PM
    • #2
    • 12th Oct 16, 1:09 PM
    You're officially renting it out and she is paying you rent.

    You need to declare this to the tax man.

    You need to compare the rental income (payment she makes) with the INTEREST ONLY element of the mortgage. Those are the two items relevant for your tax return. Any repayment element is irrelevant.
    • Thrugelmir
    • By Thrugelmir 12th Oct 16, 1:12 PM
    • 51,249 Posts
    • 43,034 Thanks
    Thrugelmir
    • #3
    • 12th Oct 16, 1:12 PM
    • #3
    • 12th Oct 16, 1:12 PM
    Your issue is tax. The HMRC would construe that the money paid by your MIL is rent in your hands. The fact it's used to repay the mortgage is irrelevant.

    Is this currently a residential mortgage or a buy to let?

    Is the lender aware that a related family member is in residence?
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • spidermoney
    • By spidermoney 12th Oct 16, 1:40 PM
    • 4 Posts
    • 0 Thanks
    spidermoney
    • #4
    • 12th Oct 16, 1:40 PM
    • #4
    • 12th Oct 16, 1:40 PM
    thanks for your replies

    its a residential mortgage, currently a year into a 2 year deal.

    yes they do know my MIL is living there.

    Shall i put her back on the mortgage deeds.?
    would that make a difference?
    we only removed her for this deal.
    I been thinking about this and kind of thought id have a reply like this.
    • Pixie5740
    • By Pixie5740 12th Oct 16, 1:58 PM
    • 8,849 Posts
    • 11,857 Thanks
    Pixie5740
    • #5
    • 12th Oct 16, 1:58 PM
    • #5
    • 12th Oct 16, 1:58 PM
    Do you live in the property with your MIL?

    If she got divorced 9 years ago and she is still financially linked to her ex-husband so that his credit files are affecting hers then she needs to get that sorted out.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • getmore4less
    • By getmore4less 12th Oct 16, 3:46 PM
    • 26,254 Posts
    • 15,792 Thanks
    getmore4less
    • #6
    • 12th Oct 16, 3:46 PM
    • #6
    • 12th Oct 16, 3:46 PM
    Fix the credit records first.

    While doing that document the timeline and analyse the various transactions properly to establish the various beneficial interests gifts purchases and their impact on the various taxes(cgt,iht,income) then formulate a pls to undo any mess and minimise exposure.
    • spidermoney
    • By spidermoney 12th Oct 16, 4:54 PM
    • 4 Posts
    • 0 Thanks
    spidermoney
    • #7
    • 12th Oct 16, 4:54 PM
    • #7
    • 12th Oct 16, 4:54 PM
    Ok thanks
    I do not live in the property
    Just as i thought ,its now obvious i cant do this ,so i will get her name back on the deeds and take a joint mortgage out again next year.

    That seems the best way forward.

    (All the credit problems have been sorted now as she is divorced & he died!!)
    • SavingSteve
    • By SavingSteve 12th Oct 16, 5:16 PM
    • 476 Posts
    • 205 Thanks
    SavingSteve
    • #8
    • 12th Oct 16, 5:16 PM
    • #8
    • 12th Oct 16, 5:16 PM
    In the mean time:

    1) You should ensure you have a formal consent to let if you're not living there
    2) You'll need to declare this to HMRC
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