Buy to Let Investment - Joint Owners on Title Deeds/Tax Info

lvm

Hello,

Looking for a bit of advice from you tax and property experts out there.

My parents are looking to help me invest in property and are hoping to complete a purchase in or around August.

Now, due to some previous "mishaps", I will not be accepted for a mortgage of any sort any time in the near future (6 defaults, all 3 years old). I was lucky enough to buy my own property before any credit issues.

So...the plan is for my Mother to obtain the B2L mortgage (of which she has many) and I would be on the Title Deeds. In around 12 months or so, my Mother will be removed from Deeds (hopefully avoiding the need for me to pay CGT).

Anyway, the property could bring in around £2-3k profit a year. My Mother, with her current salary and profit from various other rental properties could hit the 40% tax bracket.

So...with the joint Title Deeds, would both of us have to submit Self Assessments for 50% of income? Or could I take 100% (my salary is somewhat lower and I'd only pay 20%)? Or would my Mother have to take whole profit as mortgage in her name?

The property will be my sole responsibility and I will be keeping all profit - I would be paying mortgage and any other liabilities in any void periods.

Could an agreement be put in place between my Mother and I where I agree to pay the mortgage costs so that she has £0 profit a month?

Are there any other sensible ways of doing this?

Thanks for any help!

G_M

If both names are on the property Title, then both names must be on the mortgage agreement.
You are assuming you will be accepted by a lender for a joint BTL mortgage (doubtful given your history?).
However, if you cross that hurdle, then see the HMRC website here, and contact HMRC for further guidance.

If you let property jointly


If you let property with someone else, when you fill in your tax returns, or forms P810, you should each show your share of:

• the income and expenses
• the profit (or loss)

The help notes for your tax return explain how to do this

lvm

G_M wrote: »

If both names are on the property Title, then both names must be on the mortgage agreement.
You are assuming you will be accepted by a lender for a joint BTL mortgage (doubtful given your history?).
However, if you cross that hurdle, then see the HMRC website here, and contact HMRC for further guidance.

If you let property jointly



If you let property with someone else, when you fill in your tax returns, or forms P810, you should each show your share of:

• the income and expenses
• the profit (or loss)

The help notes for your tax return explain how to do this

Thanks for the reply. Was actually advised otherwise with regards to Title Deeds - told I could be on them without being on mortgage. Oh well, back to the drawing board.

Thanks again!

G_M

lvm wrote: »

Thanks for the reply. Was actually advised otherwise with regards to Title Deeds - told I could be on them without being on mortgage. Oh well, back to the drawing board.

Thanks again!

Think about it. If the mortgage is not paid and the bank wants to repossess the house, who do they take action against?

Obviously it has to be thir client, who is on the mortgage agreement. So how do they evict the 'other' property owner and get possession of the property?

No, I'm afraid they will insist you are on the mortgage if you joint-own the property.