Some advice needed

smileypigface

If it were me, with the financial minefield your OH appears to have put himself in, I would possibly discuss how you both view the future 4 years panning out - and how you both view life after you are married.

At least you have 4 years to get both of you singing off the same financial hymn sheet, so to speak.

If I've understood it correctly - the ex-Council house in his FIL2B's name (ie, he owns it) - he had (possibly still has) a large amount of debt that was wrapped into the size of the mortgage taken out to buy the house from the Council.

Your OH has been paying the mortgage and all the bills - so is effectively putting a roof over his father's head and also paying off the debt that was consolidated into the mortgage.

As others have pointed out - if the FIL2B dies while the house is in his name it would possibly (depending on arrangements made in a will) have to be shared with any other next of kin.

There is also the fact that you can't just sign over a very high value asset to your son without having to pay Capital Gains Tax - I was in this position with my sister - we bought a house together - her name on mortgage but I lived in house and paid mortgage and bills - BUT - importantly, we had drawn up a legal agreement at the outset and I retained proof of payments so when we sold the house and split the proceeds according to our agreement there was no Capital Gains Tax to pay because we could prove everything. (She did have to pay tax on her share of the profit as it had not been her primary residence for the whole period). HOWEVER, in your OH's circumstances he can hardly offer proof that he has been paying everything as he will be admitting that he and his father set out to break the terms of the Right To Buy rules.

Also, if the father's debts are still ongoing and his assets end up being siezed to satisfy the debts then the house could be taken anyway - regardless of who has been paying the bills.

Another angle is that, if your OH tried the argument that his contributions have been rent paid to his father, then I assume the value per year of these payments exceeds the tax-free rent-a-room allowance so the father would also have a considerable income tax bill to pay.

As I said, it's a financial minefield and possibly not the best basis for setting out on a married life together.

If you discuss this together now, you have time to put in place a plan that you are both committed to, to unravel your OH from this financial situation so that in 4 years time you embark on married life with a clear financial sheet - that is, of course, if your OH sees this as a priority ... if he doesn't then you are potentially looking at legally linking your finances into a situation that could be most undesireable.

Good luck finding a way forward x

Stephb1986_2

Thankyou smileypigface atleast you know where I am coming from with the money side of things. Why should I give all of my money to his dad? I do have quite a bit in bonds, isa's and a few other things.

I can understand that his dad's name is on the deed so therefore technically his house but what I'm saying is if it wasn't for my OH his dad wouldn't have a house. His dad has agreed to sign the house over once the 5 years is over if that happens I do not know I don't think he will and I have already raised the concern with him about this but he wants to see the best out of his dad that he will do it. Where as I live in the real world. I am very close to my mum and step dad and my OH has shared this information with them and they seem to think the same as me that his dad will rip him off.

I think that it would just be easier if he sold the house his dad got his own place and we find somewhere together. I don't want to leave where I live and work and he doesn't want to leave where he lives and works. I have family in the area I live in as he does. So the only comprimise I can think of is somewhere in the middle of where we both live.

I've prepared myself for tonight I just hope it works out right.

Thanks for all the advice

Steph xx

Errata

Good luck. Bear in mind his dad would still have the house if his son hadn't taken out a mortgage, because it was a council house with secured tenure and he would have just carried on renting it
People promise to do all manner of things, but don't when the times comes. Why would his dad give his son a house and move into rented accommodation with no security of tenure if he isn't legally required to, and he isn't. He appears to be a sponging layabout now - leopards don't change their spots.
Good solid relationships require a bit of give and take. Agreeing to live halfway between his dad and your family means both of you give and both of you take and is a fair compromise.

RAS

smileypigface wrote: »

If it were me, with the financial minefield your OH appears to have put himself in

Massive

smileypigface wrote: »

There is also the fact that you can't just sign over a very high value asset to your son without having to pay Capital Gains Tax

Yes you can, as this house is father's main residence, which means that there is no CGT liability.

HOWEVER, if father signs it over and remains in the house afterwards, not paying market rent, then it would be a gift with reservation for Inheritance Tax purposes.

He might also run into the disposal of assets reguations if father has to move into residential care, as well.

smileypigface wrote: »

Also, if the father's debts are still ongoing and his assets end up being siezed to satisfy the debts then the house could be taken anyway - regardless of who has been paying the bills.

Not exactly but the creditors could place a charge on the house, whch would means that before father could transfer the house to OH, the cost of that debt had to be paid to the creditor.

smileypigface wrote: »

Another angle is that, if your OH tried the argument that his contributions have been rent paid to his father, then I assume the value per year of these payments exceeds the tax-free rent-a-room allowance so the father would also have a considerable income tax bill to pay.

The lodging allowance is about £370 per month.

JBD

Stephb1986 wrote: »

Thankyou smileypigface atleast you know where I am coming from with the money side of things. Why should I give all of my money to his dad? I do have quite a bit in bonds, isa's and a few other things.

I can understand that his dad's name is on the deed so therefore technically his house but what I'm saying is if it wasn't for my OH his dad wouldn't have a house. His dad has agreed to sign the house over once the 5 years is over if that happens I do not know I don't think he will and I have already raised the concern with him about this but he wants to see the best out of his dad that he will do it. Where as I live in the real world. I am very close to my mum and step dad and my OH has shared this information with them and they seem to think the same as me that his dad will rip him off.

I think that it would just be easier if he sold the house his dad got his own place and we find somewhere together. I don't want to leave where I live and work and he doesn't want to leave where he lives and works. I have family in the area I live in as he does. So the only comprimise I can think of is somewhere in the middle of where we both live.

I've prepared myself for tonight I just hope it works out right.

Thanks for all the advice

Steph xx

Steph, can only suggest your fiance takes legal advice [which hopefully he did before he entered into this arrangement.]If it was all done legally and above board then there shouldn't be any problems. If it wasn't then there are obviously going to be big problems and your OH may just lose out on his investment. In any case, surely your own money is a completely different issue. Why do you think you would have to give it to his Dad?

Pollycat

Stephb1986 wrote: »

I can understand that his dad's name is on the deed so therefore technically his house but what I'm saying is if it wasn't for my OH his dad wouldn't have a house. His dad has agreed to sign the house over once the 5 years is over if that happens I do not know I don't think he will and I have already raised the concern with him about this but he wants to see the best out of his dad that he will do it. Where as I live in the real world. I am very close to my mum and step dad and my OH has shared this information with them and they seem to think the same as me that his dad will rip him off.

I think that it would just be easier if he sold the house his dad got his own place and we find somewhere together. I don't want to leave where I live and work and he doesn't want to leave where he lives and works. I have family in the area I live in as he does. So the only comprimise I can think of is somewhere in the middle of where we both live.

I've prepared myself for tonight I just hope it works out right.

Thanks for all the advice

Steph xx

Steph
re your quote in bold - you're mixing up what might be morally right and what is legally right.
And legally, the house belongs to his Dad - end of.
So your OH may be throwing £thousands away paying a mortgage on a house that he doesn't own and may never own outright.
The fact that if it wasn't for your OH his Dad wouldn't have a house means absolutely nothing from a legal perpective.

Oldernotwiser

Stephb1986 wrote: »

I think that it would just be easier if he sold the house his dad got his own place and we find somewhere together.

Your fiance CANNOT sell this house as he doesn't own it.His father doesn't need to get his own place as he owns the house he lives in. You cannot just look on this fact as a technicality!

As you have substantial savings and a successful business, why not solve all your problems and buy your own place? It may be expensive but would seem to be a better use of your money than spending 4 years(!) saving for an expensive wedding.

Nobody can know how things will work out in this relationship but at least you will be independent and living in your own home.

Person_one

It sounds like your fiance has got himself tangled up in a pretty complicated financial web here! Previous posters have explained the problems with it so my advice is that you absolutely must start dealing with this issue now and put a plan in place to have it resolved before you get married. I'd say within 3 years not 4 as I feel its important to live together for a bit before getting married.

Your fiance's dad will have to be part of the process I'm afraid, he's a major player! Can I ask what makes you think he wouldn't have a home if your fiance hadn't bought the house? Was he about to be evicted?

Personally I don't think its unreasonable to expect to live with your partner in your own home, whether owned or rented, just the two of you. You need this time and privacy at the beginning of a relationship before kids and possibly elderly parents start to take your time away from you.

paddy's_mum

It seems to me that your biggest problem is that neither your fiance nor his father can see any problem. There's a strong case to be made that they have supported one another in some very dubious dealings and decisions and guess who'll end up in the middle of the mess?

I'd be insisting that changes are made now or else the engagement is off. I have a nasty feeling that you'll find they'll resist change and stick together in their joint stupidities, leaving you either to stomach whatever they choose to hand out or leave.

Stephb1986_2

Yes he was about to be evicted as his wife had left him and the only one who stuck by him was my OH, his dad's debts are uncontrolable he's still doing it now he's not even allowed a contract phone!!

I know I have to deal with this situation now before it's too late. I think we should live together for a bit before we get married because at the moment we only get to see eachother at the weekend it's very hard and I live for the weekends that we get to spend with eachother.

Seems it might be more complicated than I first thought

Steph xx