Tax implications on joint mortgage

vxdave

Hi All!
Wondered if anyone can help me for the below situation.
I live in a flat that I am currently lucky enough to own outright. However, for various reasons I now need to take equity out of the flat so I am looking to remortgage. The problem is that I don’t have enough income to get a mortgage right now so my Dad would have to come onto the mortgage with me.
I believe this scenario would mean we then both have an equal share in the property despite me obviously funding the deposit (from the value in the flat already) and paying the monthly payments myself. My Dad would simply be on the mortgage for the purpose of getting a mortgage.
Obviously when I come to sell this may then have capital gains tax implications (will be my main residence but not his) and may also have inheritance tax implications. (i.e. if my Dad was to do the above scenario with both myself & my brother he would have a 50% stake in both our properties, plus 100% of his own, so would then be over the inheritance tax threshold). It seems unfair that we may have to pay inheritance tax on a property(s) that are ‘actually’ our own but are legally partly our fathers, if you see what I mean?!
Is there any way round this? i.e. Can I have a joint mortgage but the title of the flat remains just in mine? I’m guessing not?? Any advice is very much appreciated!!

Thrugelmir

For whatever you are trying to achieve this is a mind boggling scenario.

Easier option would be for your father to lend you the money and hold a charge against the property as security. You then repay your father direct.

vxdave

thanks for the reply.

To simplfy, I need cash to start a business which is why I want to remortgage. My father owns his home outright but does not have much liquid cash hence I can't just borrow money from him. I agree its a strange situation!

GMS

Equity is not a pot of cash. It is only accessible if circumstances allow.

You say you could not arrange a mortgage but can make the monthly repayments. How can this be? If you can pay the mortgage then why not arrange the loan?

If you add your father to the deeds you could specify a percentage of ownership by tenancy in common.

Complicated transaction by the sounds of it. Neex to get professional advice

CLAPTON

RIRO

some facts would be useful

how much do you want to borrow
what is your income
what is your property worth
what debts do you have

what is your father's income
how old is he
what is his property worth
what is his mortgage
what debts does he have
is his wife alive
what is her income
what debts does she have


and that's just for starters

vxdave

Thanks for the reply's everyone! I will look into tenacy in common & will prop seek solicitor advice. May end up just selling the flat & renting for a bit as that would have life a lot easier!!

Thrugelmir

With your property as security, you may be able to obtain commercial funding for your business. The cost of the funding would be offsetable against your business income. So may be worth seeking professional advice before making a rash decision.