Grandfather wants name on deeds ??????

tilerone

Hi there,
I currently live with my partner in rented property. Her grandfather has decided to give her £35,000 towards a deposit to buy a house. The mortgage is going to be in her name alone (due to me being self employed and other things). It will be my money that is invested in renovating the new property.
Now this money we were told was going to be a gift. But now he has decided he wants his name on the deeds, and has told my partner it is for TAX reasons. I have looked into this and can find NO reason TAX wise (inhertance or otherwise) that his name should be on the deeds. I have read loads regarding inheritance tax and understand thresholds etc etc and that once he passes away, depending on the value of his total estate we maybe stung possibliy with IHT.

Can anyone tell me why he wouild want his name on the deeds regarding TAX ? And about any possible problems which may occur from this if he does die wether it be within the 7 yrs period or not, for us?
Any advice regarding this matter or pitfalls to watch for is greatly appreciated
Thanks

PS. I will shortly be taking profesional advice on this matter too. But advice is welcome

lemontart

probally to protect the investment in his grand-daughter - please do not take it personally but you have not married so maybe in his eyes it shows a lack of commitment and by having his name in deeds he ensures some control over the property maybe in a way to proctect her and it is a very generous gift to her and not you at the end of the day, - I may be wrong but my daughter may be renting her house her father will buy but the house will stay in his name as she will not be married at that time - and the money is coming from her inheritance - so if anything goes wrong she still has that in tact and a home - could be a similiar thing much as we love our future son in law - she is our daughter and in your case it is her grandfather - there is also the recession and you being self employed and her employed should something finacialy nasty happens it makes it harder for the house to get taken

clutton_2

he has no security if his name is not recorded as being an interested party

families do fall out .....

lemontart

http://uk.biz.yahoo.com/02112009/389/protect-finances-ex.html

this is an interesting article too

RLH33

Not an expert but it sounds like he is protecting his own rather than it being for tax reasons.

What I wonder though is why your name is not going to be on the deeds/mortgage as you say you will be investing the money in doing the house up. You do realise that if you spend all your money doing it up then, God Forbid, split up you will have a very hard job getting any money back.

nat82

How will this go down with the Mortgage Application? The reason I ask is because, my great aunt gifted us the remainder of our deposit and our lender asked for written confirmation from her that she had no interest in the house, the money was a gift and she didn't want it back or is it different as the mortgage will only be in the grand-daughters name and not the OP?

Just being curious!

david29dpo

RLH33 wrote: »

Not an expert but it sounds like he is protecting his own rather than it being for tax reasons.

What I wonder though is why your name is not going to be on the deeds/mortgage as you say you will be investing the money in doing the house up. You do realise that if you spend all your money doing it up then, God Forbid, split up you will have a very hard job getting any money back.

I was wondering this. If he wants his name on, then so should you. (you should anyway)

not_tonight_josephine_2

If the grandfather is named on the deeds as a joint owner of the property then I do not believe that your GF will be able to get a sole mortgage on the house - as I understand it all owners of a property must be on the mortgage, otherwise the lender cannot reposess in the event of a default (ie your girlfriend is only a part owner and the lender cannot reposess part of a house).

danielanthony

If you are on the deeds then you are on the mortgage and your credit file will be assessed.

Hopefully granddad has no defaults on his credit file, plus some income which will help him make the repayments should his granddaughter default on the repayments as he will be equally liable.

poppysarah

So you're not going to be on the mortgage but you'll be contributing towards increasing the value of the house... How's that going to work out for you if in a couple of years time you split up?

mlz1413

poppysarah wrote: »

So you're not going to be on the mortgage but you'll be contributing towards increasing the value of the house... How's that going to work out for you if in a couple of years time you split up?

Flip side is if the renovated house is worth less in a couple of years then he can walk away.

I'm not a tax expert but like others can't see this being the main reason, but in the name of family relationships it is probably best not to question g/dads motives but to ensure a workable agreement is put in place.

If your g/f is to be the sole mortgagee then she will need to discuss with the lender the title deeds being joint.
If g/dad wants his money back or interest paying you need to know before accepting.
If you will be working on and paying towards house you need to discuss with your g/f how this is recognised.
If you are only paying rent and not part of the daily running of the house then a pre-nup maybe easiest written agreement.