Hi. Paying some one else mortgage adivce!

pouka89

Hi there,

Basically my mother in law died two years ago and she was the main worker with her and her husband. After she died me and my husband moved in (his father moved out) and we started paying the mortgage so we wouldnt loose the house. (It is a big house and his sisters live in a converted garage).

The trouble is the mortgage left is still £312k. We are paying the mortgage bill every month (intrest plus some extra = £1200) But we own our own business and when we have looked online will need a HUGE deposit in order to get our own mortgage for the house.

Basically the advice I want is what can we do to legally secure ourselves. The house is all in Father in laws name, so we are worried if anything happens to him we could loose the house. Even though we have paid the mortgage every month for over a year now.

HappyMJ

It would be seen by a court that you are renting it paying rent to your FIL and then he pays the mortgage with your money even though you might appear to be paying the mortgage directly.

How much equity is yours? Is it worth fighting over?

You could set up a legitimate tenancy agreement so that your FIL would be fully responsible for any maintenance and repairs on the property. That might get him to take some action to sell it to you.

Thrugelmir

As HMJ says the payments you are making will be viewed as rent.

You FIL is therefore accumulating a large tax bill plus penalties and interest for non declaration of income and filing an incorrect self assessment form (if one at all).

You need to take advice before the situation blows up in your faces.

DVardysShadow

Thrugelmir wrote: »

As HMJ says the payments you are making will be viewed as rent.

You FIL is therefore accumulating a large tax bill plus penalties and interest for non declaration of income and filing an incorrect self assessment form (if one at all).

You need to take advice before the situation blows up in your faces.

He could set the mortgage payment against the income, and might possibly not be in such huge trouble. Take advice, but I understand it is best to tell HMRC of something like this earlier rather than let them find out later.

Thrugelmir

DVardysShadow wrote: »

He could set the mortgage payment against the income, and might possibly not be in such huge trouble. Take advice, but I understand it is best to tell HMRC of something like this earlier rather than let them find out later.

I do not jest.

Penalties for missing the tax return deadline
Length of delay - Penalty you will have to pay

1 day late - A penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.

3 months late - £10 for each following day - up to a 90 day maximum of £900. This is as well as the fixed penalty above.

6 months late - £300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.

12 months late- £300 or 5% of the tax due, whichever is the higher.

In serious cases you may be asked to pay up to 100% of the tax due instead. These are as well as the penalties above.

This is per tax year.

Yorkie1

Plus, as it's viewed as rent, he should be complying with all the other obligations of a LL, such as gas safety certificate, LL's insurance, consent to let ...

DVardysShadow

Thrugelmir wrote: »

I do not jest.
This is per tax year.

I am not confusing making little mountains out of big molehills with jesting.

You quote the penalties, but all that would really apply is the late penalty, not the % penalty, because no tax is due.

Thrugelmir

DVardysShadow wrote: »

because no tax is due.

That needs to be determined not assumed.