mortgage arrangement too long

b21playa

Right the story.

Parents purchased a 2nd house before selling 1st house, they had 3yers to sell to avoid CGT, and the time has cme to sell. needs to go by 1st week April.

Ive decided to buy the house off them as my first home. Find best mortage for me is with First Direct, but they said it will take 10weeks for money transfer.

Now my parents need their name off the deeds before the mortgage company will release payment

Is there anyway around this? Not happy to pay any CGT.

Premier_2

Why does it take 10 weeks to transfer money?

Use CHAPS/TT transfer and it can transfer the same day.

Or do you mean they won't lend you the money for 10 weeks? In which case choose another lender. In today's environment there's no guarantee an offer will be honoured by the end of the week let alone in 10 weeks time.

b21playa

Is it possible to borrow the money from a relative and then remortage the house to pay pack the money?

This way sale will go through quicker, as no mortgage application to wait for

_Andy_

They meant 10 weeks from point of application to completion.

b21playa

right, spoke to solicitor.

He said he can process sale, I have to pay £30k deposit and he wil draw up a contract to say I owe the remaining £70k.

I will then get a retrospective mortgage. aRe these classed as a remortage?

silvercar

If you and your parents are doing this just to avoid CGT they need better tax advice!

Did they make a PPR declaration within 2 years of woneing both homes? Which home have they lived in for the last 2 years? Are the homes in joint names? Have they let either property while waiting for a sale? Have they used their CGT allowances this year?

If they do need to go ahead, CGT calculations are made with reference to exchange date not complete date, so there isn't a rush to get the mortgage funds, provided contracts have been exchanged.

b21playa

silvercar wrote: »

If you and your parents are doing this just to avoid CGT they need better tax advice!

Did they make a PPR declaration within 2 years of woneing both homes? Which home have they lived in for the last 2 years? Are the homes in joint names? Have they let either property while waiting for a sale? Have they used their CGT allowances this year?

If they do need to go ahead, CGT calculations are made with reference to exchange date not complete date, so there isn't a rush to get the mortgage funds, provided contracts have been exchanged.

Hi

Yes PPR dec was made before the 2years.
They have lived in the new house for the last 2 years. Both homes in joint names (mum&dad).
Never let any of the properties - I end up staying there as its closer to work for me

Sale will be done via £30k deposit and an signed agreement to say I owe the rest via solicitor. I will then get mortgage afterwards to pay them the rest

silvercar

Yes PPR dec was made before the 2years.

Then it gives them flexibility. Having initially made the PPR declaration they can change it to whatever minimises the CGT.

daveb975

silvercar wrote: »

Then it gives them flexibility. Having initially made the PPR declaration they can change it to whatever minimises the CGT.

That is interesting. My understanding of this was that if you sell your previous home within 3 years of moving out of it, then no CGT is payable at all upon sale, provided that you have lived there a certain number of years.

After than CGT is payable, but with allowances for the length of time you lived in the property.

I probably need to update myslef on these rules!

silvercar

daveb975 wrote: »

That is interesting. My understanding of this was that if you sell your previous home within 3 years of moving out of it, then no CGT is payable at all upon sale, provided that you have lived there a certain number of years.

After than CGT is payable, but with allowances for the length of time you lived in the property.

I probably need to update myslef on these rules!

You are right.

There is an added flexibility if you own more than one home and both are available to you (ie not let). A simple example would be a london flat and country residence.

If, in the first 2 years of owning both, you declare one or other to be your PPR you can at any time change the declaration. So, you could redeclare one to be your PPR just before sale to get the last 3 years of ownership exemption on that one. Then you revert to the other one. Just sometimes it can work to your advantage.