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  • FIRST POST
    • love2learn
    • By love2learn 16th Jul 17, 12:17 PM
    • 159Posts
    • 8Thanks
    love2learn
    Question
    • #1
    • 16th Jul 17, 12:17 PM
    Question 16th Jul 17 at 12:17 PM
    Hi,

    Not sure if this is the right section of the forum, but as it's to do with debt I though I should ask it here.

    My wife and I are considering selling our current house and moving to a cheaper area where we could be mortgage free.

    We're considering buying the house in my name only, the reason for this is my wife is the only wage earner as I look after our child during the day. (House husband) We're looking at then buying a flat to rent out on a buy to let basis.

    I want to know that if the house is bought in my name (main home), and my wife has a buy to let mortgage on the flat in her name only, if there was ever an issue with paying the mortgage on that buy to let flat... can creditors for the mortgage in my wife's name persue me for our main home that would only be in my name?

Page 1
    • sourcrates
    • By sourcrates 16th Jul 17, 12:41 PM
    • 11,953 Posts
    • 11,442 Thanks
    sourcrates
    • #2
    • 16th Jul 17, 12:41 PM
    • #2
    • 16th Jul 17, 12:41 PM
    Hi,

    In a nutshell, no.

    Debt does not transfer to other people, debt in one persons name, stays with that person.

    It may, if you have other joint financial products, effect your credit file to some extent, but creditors would not be able to pursue you, or anyone else, for any debt in her name.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • dancing_star
    • By dancing_star 16th Jul 17, 4:54 PM
    • 104 Posts
    • 169 Thanks
    dancing_star
    • #3
    • 16th Jul 17, 4:54 PM
    • #3
    • 16th Jul 17, 4:54 PM
    Not debt related, but having the BTL property in the name of the higher earner may not be the most tax efficient way of doing it, as she would pay a higher rate of tax on the income than you (and you have your personal allowance).

    Also, when you come to sell it, if the profit is over the annual CGT allowance, could be CGT payable.

    Apologies if you already knew this.
    • love2learn
    • By love2learn 16th Jul 17, 8:39 PM
    • 159 Posts
    • 8 Thanks
    love2learn
    • #4
    • 16th Jul 17, 8:39 PM
    • #4
    • 16th Jul 17, 8:39 PM
    Not debt related, but having the BTL property in the name of the higher earner may not be the most tax efficient way of doing it, as she would pay a higher rate of tax on the income than you (and you have your personal allowance).

    Also, when you come to sell it, if the profit is over the annual CGT allowance, could be CGT payable.

    Apologies if you already knew this.
    Originally posted by dancing_star
    Yeah we'd pay more tax on the profits, but it would need to be in my wife's name whilst the mortgage is on it as she's the one with the income. We'd put our main home in my name so it can't be touched by creditors if we ever had an issue paying the mortgage on the BTL flat, I doubt we would have, but best to prepare for anything.

    After it's paid of she could transfer it to me to benefit from my tax free allowance and lower threshold (I have no income) and she's a 40% payer.

    • mumofthetwins
    • By mumofthetwins 17th Jul 17, 10:16 AM
    • 836 Posts
    • 3,653 Thanks
    mumofthetwins
    • #5
    • 17th Jul 17, 10:16 AM
    • #5
    • 17th Jul 17, 10:16 AM
    I thought you would need the gaurenteed (wage) income for your main mortgage, when we took out a buy to let mortgage (a few year ago mind) we were told that the rental income was the basis for the BTL mortgage.
    Lisa x
    This time I'm sticking with it !!

    May £264.56/£300 NSD lost track but much more than last month / 38 June £216.30/£300 NSD 15/30 July £120.21/£300 NSD 11/15 Aug £96.46/£300 6 NSD
    PAD
    June £3362.78 July £1803.88 Aug £1895
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