Splitting up !

Dawn1708

Please can someone help :)I'm in the process of splitting up from my BF. We own a house which is near enough paid off. Worth about £220000. We are on good terms and may even get back together in the future but we both feel we need a bit of a break after 20 years. We are more like best friends now.Anyway, the plan is for me to keep the house and for me to buy him a flat with some inheritance I have been lucky enough to get. The flat is about £100k.He will wave all rights to the house if I buy him the flat. Are there any legal things I need to know. Am I allowed to do this ? What if we get back together and need to sell the flat which is quite likely at some stage. We just need to live apart for a while.Obviously going to get some legal advice but everything seem so complicated !! Hoping someone may be able to help !Thanks in advance !

steve1980

Why don't you buy the flat, he can rent it from you, then if/when you get back together you can continue to rent the flat out and have a pension.

Dawn1708

It is possible that we wont get back together so want to officially split. Time apart may change things and just think it's easier to completely seperate for now. A friend said if we were to get back together we may have to pay for gains tax or something if we sold the flat, don't know about these things!. If we were to get back together, I can't see us getting back together for at least a year or so.

steve1980

There would have to be an agreement drawn up about who is paying for what, what one expects off the other, what rights you have, what rights he has, what would happen if you got back together etc etc

Dawn1708

would it be a solicitor that did that, guessing it could be done at the time I buy the flat ? I guess I would also need to change the deeds of the house

princeofpounds

If you are happy with the valuations then it seems fine. You will need to get a lawyer if you want the settlement to be watertight. It's probably a good idea considering it's a relatively simple situation so it won't cost the earth compared to the sums of money involved. Plus you will need one anyway to change the deeds most likely.

You want to achieve 'full and final' settlement and not keep any financial links. Continuing any financial relationship would be really stupid as you might not always be so amicable.

Basically, ignoring all other assets, it is likely to be presumed that you own the house 50/50. So if you keep the house you owe him 110k. You can pay that to him in property if you both agree.

Stamp duty is not such an issue due to the value of the property. Capital gains tax is what you seem to be worried about. You will be fine on this if he has to sell the flat again to move back in - he should just make sure it has been his principal residence and you will get an exemption.

Selling is not necessarily a cheap or quick process, so if this is a trial separation it might be unwieldy and you might be better off renting a flat and paying half each (because although you will not be resident you are benefitting from the half of the house that he owns). I would advise renting from a third party and not establishing a LL/T relationship on top of your romantic relationship and associated breakdown.

kingstreet

Dawn1708 wrote: »

Please can someone help :)I'm in the process of splitting up from my BF. We own a house which is near enough paid off. Worth about £220000.

The party to remain in the property/mortgage should approach the lender for a transfer of equity.

If the borrower's income is sufficient to maintain affordability, the lender will normally permit the change

At that point, the matter will be passed to a solicitor for the transfer of equity to be completed. Once both parties have given their agreement, the leaving borrower is removed from the mortgage and the deeds to the property so they have no further interest in it.

A transfer of equity typically costs between £400 and £600.

LittleMissGiggles123

Would it be an easier arrangement to 'pay' him that money to buy his share of the house, then he can just buy the flat himself with the money? You can still get everything done properly through solicitors.

Dawn1708

thanks everyone, all seems very complicated !!What if I bought the flat and let him live there rent free and do nothing with the house for the time being. Could I put it in his name (obviously with something drawn up by a solicitor). I wanted to invest in a property anyway and if things don't turn out the way we want then sort out the house later. And if he came back would we have to pay gains tax on the flat, I guess not if it’s his main residence ? Is there a certain amount of time you have to live somewhere for it to become you main residence. Sorry for all the question but I haven't moved in nearly 20 years and it all seems to have changed since the old days and to be honest he did everything then !!thanks

JimmyTheWig

I was going to say what LittleMissGiggles123 suggested. Buying someone a flat seems like a complicated way to go about things. As does waiving rights to a house.
You use your inheritance to buy him out of the house.
he then uses that money to buy a flat.
You live in your house.
He lives in his flat.
Everyone is happy.
You would need to get the existing mortgage (about £20k, I'm guessing) moved into your name. Would this be a problem? Or could you pay it off as well as give him £100k?

And I totally agree with everyone who is saying to get it looked at by a solicitor.

If you then got back together again in the future then he could rent out his flat and give you (some of?) the proceeds as rent, given that he would be living in a house wholly owned by you. Or he could sell the flat and use the proceeds to buy half the house back off you.

If you decide to stay apart and remain friends then fine.
If you drift apart or if there is animosity between you (e.g. one of you gets a new partner that the other one doesn't approve of / is jealous of) then you've got your own places and the finances/living arrangements don't need to add any further complications.

NeverAgain_2

I don't think investing in a property is very wise, because you will have to do it with borrowed money, and you sensibly concede you are not expert or experienced in buying and selling.

One way would be to sell the house, give boyfriend his half, leaving you with about £100K from the house sale, plus your inheritance which sounds about the same.

You could then buy two flats for cash, live in one and rent the other.