First time looking at shared ownership

storeton

to VIGILANTE
I think you have got hold of the wrong end of the stick here
It is a choice of me and my sister taking over the secured loan on the property or a forced fire sale to pay off the loan,I would expect little capital left if the vultures descended and if that happened anyway it would negate any deprivation of assets and evading tax etc. they are not like an multimillionaire Lord Ashcroft (and his cronies in parliment)but they would have to be knocking on councils door looking for accomodation and all the benefits they would be entitled to any British tax and rate payer, but don't want to if it can be LEGALLY avoided.
But giving advise about witholding assets and care homes with the ageconcearn website you have highlighted when at this moment in time when they are fit and well 57 year olds does not come into any equation,it's a bit of an insult really.
But I'll take it as a warning over the possible legalities
But just wanted info like how max. people can have a shared mortgage etc.
Hope this put you straight
storeton

zzzLazyDaisy

Can I ask if you and your sister will be living in the house?

If not, will your parents be paying you a market rent? Say about the amount that they currently pay in mortgage payments?

The reason I ask is that if you won't be living there,. then you are looking for a buy-to-let mortgage which may have stricter conditions than a residential mortgage, but on the other hand the lender would take into account any rent being received. Also, you have to be aware that the value of a house with tenants (ie your parents) is going to be considerably less than a house with vacant possession so the value the lender puts on the house will be reduced, possibly considerably.

There may be an alternative though - do your parents have an income? If they have not defaulted on the mortgage so far, the lender may agree to extend the mortgage - perhaps with you and your sister being guarantors.

I am sure that you have thought of this - but if you buy your parents' house or act as guarantor on the mortgage, you may find it difficult/impossible to get a mortgage to buy a place of your own later.

EDIT - have you considered speaking to a mortgage broker?

storeton

My sister and I will live in the house,and my parents will technically be paying us rent around the mortgage monthly repayment figure.
No they have never defaulted on mortgage payments
They took out remortgage with GMAC and eventually ended with a finance company Topaz,they have asked them about extended the mortgage but they were not interested as they are not the standard mortgage lenders and you have to pay the oustanding amount in full at end of term,so as you mentioned us as guarantors will not change their opinion
Yes my parents have an income
I think my sister and I find living at home too good to leave!!
Yes we are considering the mortgage broker route but need to find one worth his fees
thanks for your input zzz Lazy Daisy most appreciated
storeton

VIGILANT22

You may think posting re deprivation of assets "it's a bit of an insult really"....HMRC wouldn't see it that way...just because they're 57 doesn't mean they are exempt from taking ill (which i hope they don't) ...You will have to declare to new lender yr parents are remaining in the house after purchase....and they will have to sign a Letter of Consent this protects the lender should they ever need to sell the property:
- to make them leave the house
- to ensure the lender has first claim to the proceeds of the sale
How are you going to deal with the “rent” as unearned income?

VIGILANT22

storeton wrote: »

My sister and I will live in the house,and my parents will technically be paying us rent around the mortgage monthly repayment figure.
No they have never defaulted on mortgage payments
They took out remortgage with GMAC and eventually ended with a finance company Topaz,they have asked them about extended the mortgage but they were not interested as they are not the standard mortgage lenders and you have to pay the oustanding amount in full at end of term,so as you mentioned us as guarantors will not change their opinion
Yes my parents have an income
I think my sister and I find living at home too good to leave!!
Yes we are considering the mortgage broker route but need to find one worth his fees
thanks for your input zzz Lazy Daisy most appreciated
storeton

http://forums.moneysavingexpert.com/showthread.html?p=29722999&highlight=#post29722999

This question is a bit complicated so I have put it in this section?
I am on benefits from the DSS. My wife and I have a joint mortgage which the DSS give no help on We have the opportunity of renting another house with possible help from DSS,but, If we sell house the equity left would be above the savings limit for DSS help,but my son has got himself into a lot of debt with horrendous interest rates,I could pay his debts off with my equity but would this be considered only as a gift? and the limit is I believe only £3000 p.a. Or if I rented my old home ,I know that the rental income would be counted as unearned income by DSS but would the property be counted as an asset/investment? thanks for any advice Storeton

:rotfl::rotfl:

storeton

Yes this is all the same dilemma,how to keep a roof over the head of my parents without breaking the law,maybe the rent could be considered housekeeping?
Afterall they have to eat,need utilities etc and money has to change hands for these things maybe the people at the HMRC don't need such things ?
and your stance and vigilance is so like HMRC?
at the end of the day they want to pay their way as a good British citizens should and not rely on taxpayers money to get a home
storeton

Annisele

Storeton, I think you'd probably get some more helpful replies if you made another post of your own, with all the relevant information in one place - htafc's post has got a bit hijacked

I'm sorry to be dozy, but given your other post I can't get my head around who has income, who has debts, and who wants to live where (especially as you seem to be your own son).

Jowo_2

storeton wrote: »

My sister and I will live in the house,and my parents will technically be paying us rent around the mortgage monthly repayment figure.

Like other posters, I am getting a confused picture of who lives where, earns what, is on benefits/not on benefits, plus the various strategies you are looking into.

To me (if I grasped some of the key info), it looks like the siblings do not earn enough to buy the property, which is also hampered by the son's extensive debts. The father cannot sell it and pay off the sons debts because it will affect his entitlement to benefits, namely LHA at the next rental property, because of the deprivation of capital rules.

However, I got the impression that the parents have no income so where will this rent money come from if the siblings succeed in getting a mortgage and live there? Housing benefit isn't payable when the landlord and their close relatives live in the same property.

Jowo_2

storeton wrote: »

...maybe the rent could be considered housekeeping?
Afterall they have to eat,need utilities etc and money has to change hands for these things maybe the people at the HMRC don't need such things ?

Oh, yeah, right - the HMRC are going to ignore the taxable income received by a landlord because the tenants have a basic need for food and shelter, it's simply quite nice of them to be so benevolant.

Also, the DSS should also ignore someone claiming benefits who was found to have given away their capital so they would qualify for it on the same grounds that it's a humanitarian gesture "don't you worry, sir, it was so awfully nice of you to pay off someone else's debts that its the least the tax payer can do to support you for years when you could have done so yourself but gave your money away instead."

Stop making assumptions and weak moral arguments.

To understand how the HMRC really treat landlord's taxable income, look into the Rent a room scheme - this is where a landlord can receive the £4,250 per year overall income without paying tax on it but then pays tax on the income after that threshold. No expenses are deductible. Check CGT implications on this which should be none or quite low.

The second option for higher rent and higher expenses would be to submit an annual tax return where the valid business expenses associated with the let could be deducted from the taxable income. This will probably lead to CGT exposure during a future sale. Again, those HMRC swines have nothing better to do than charge people a small sum from their capital gains (you know, to fund the state benefit system).

The landlordzone website gives good information on the tax options for landlords - namely those who receive income from tenants in return for accommodation.