Two family properties in my name, need to buy own home - tax/mortgage implications?!

Star99_2

Hi. Need some advice please as I appear to have got myself into a messy situation without realising.!
2 years ago, my brother purchased a flat but in my name as he already has 2 houses in his name and I've never had any.!
He paid for the flat, 100% in cash.!
He has also been renting the place out I have now found out.!
My brother is now planning to transfer the house into someone else's name but at a price that's 150% more than the original purchase price.!

Then just over a year ago, my mum wanted to raise some cash against her house which was mortgage free. As she is a pensioner, she couldn't remortgage herself and asked me to do it. So I did for half of the property value. This was my first ever mortgage. My brother is now planning to take my mothers house in his name so that house is no longer in my name.!

I'm now married and need to buy a house for ourself as we're currently living in my mother in laws house and have been for over a year. But I have two properties in my name.!

I need to know what is the best way to get rid of the two properties and mortgage from my name so I can buy my own house.!
I'm afraid I could be liable for tax on the higher re-selling price and rent my brother has been receiving.!

Thanks in advance.!

CLAPTON

you have two house in your name.

how can anyone transfer that ownership without your consent ?


tax wise; a tax return should have been completed for the rental income and any resulting tax paid

capital gains tax will be payable on the sale (or transfer of ownership) of the properties: the amount depends upon the details.


it would seem unlikely that the fact of the rental was a surprise; what exactly did your think he was doing?

kidmugsy

Star99 wrote: »

2 years ago, my brother purchased a flat but in my name as he already has 2 houses in his name and I've never had any.!
He paid for the flat, 100% in cash.!

IF IT'S IN YOUR NAME YOU OWN IT. DO YOU?


My brother is now planning to transfer the house into someone else's name : HOW SO, IF YOU OWN IT?

my mum wanted to raise some cash against her house ... she couldn't remortgage herself and asked me to do it. So I did for half of the property value. PRESUMABLY YOU NOW CO-OWN THIS HOUSE SO HOW CAN YOUR BROTHER CHANGE ITS OWNERSHIP?

Has your brother been indulging in tax fraud?

G_M

If I were you, I would sell the house your brother has been renting out. It's your house, in your name.

Then use the money to:

1) pay HMRC the income tax you owe for the rent the tenants have been paying
2) pay HMRC the Capital Gains Tax you will owe due to the increase in value of the property which is not your main residence
3) pay off the mortgage on your mother's house (I'm not clear who's name that is now in, but it seems you still have a mortgage? pay it off

OK. So now you have a clean slate. No property. No mortgage.

Find yourself a nice house with your wife, get yourself a joint mortgage (with her, not your brother!), and avoid complicated deals with your finances that you don't understand and which your brother drags you into.

Sorted.

Star99_2

To be honest I didn't give it much thougt at the time. All this is new to me and I am only just realising that I am in this big mess now that I have to buy a house. I guess I was too naive.
My brother (call him brother 1) said to me at the time of purchase that the flat will be in my name for 6months then he will remove it. But 6months has now turned into two years. He didn't mention anything about renting as he was planning to do the flat up and then resell it.!

Regarding my mums house, this is currently in my name. I want the house to be removed from my name to my other brothers name (let's call him brother 2) so I can purchase my own home.!

I'm now worried about how this will affect me tax wise when none of this was for my benefit. All I was trying to do was help my mum and brother.!

Can I just transfer my mothers house into my brother 2's name for the mortgage amount?
And if I transfer my brother 1's flat into his name for 150% more than the purchase price, will I be liable for any tax? I need to know all this to avoid getting into any trouble down the line. !I don't want to be landed with a tax bill for something I haven't made a penny from and isn't really mine.!

I'm a female by the way! I've recently had a baby as well so definitely need to move out and get our own place.!

Star99_2

The flat is in my name. But brother 1 is the real owner.!
He is planning to transfer it into someone else's name because I have asked him to so I can buy my own home.!

Re my mums house, I am the owner of this house (again in name only; my mum is the real owner). I have a mortgage in my name for 50% of the value of the house. But I need it removing from my name and into my 2nd brothers name again so I can get a mortgage for my home.!

G_M

Star99 wrote: »

Can I just transfer my mothers house into my brother 2's name for the mortgage amount?
Not if there is a mortgage on it. You will need the mortgage lender's permission for any transfer of the Title.

As I said above - 3) pay off the mortgage!

And if I transfer my brother 1's flat from what I understand, it is not his flat. It is yours! You can check for £3 by downloading the Title Deed from the Land Registry here.

into his name for 150% more than the purchase price, will I be liable for any tax?
Yes - already answered! See 2) above!
I need to know all this to avoid getting into any trouble down the line. !I don't want to be landed with a tax bill for something I haven't made a penny from and isn't really mine.!
You already have a tax liability. The bill will find you at some point.

I'm a female by the way!
Sorry? Is that meant to be either an explanation or an excuse?
I've recently had a baby as well so definitely need to move out and get our own place.!

As kidmugsy asked above

Has your brother been indulging in tax fraud?

or has he been declaring the rental income to HMRC and paying tax? (clearly you haven't....)

armchairexpert

If the title is in your name, you are the owner. Your brother cannot deal with the property. If it is to be 'transferred', by which you appear to mean 'sold', you would be the vendor and any tax payable would be payable by you.

You need legal advice.

Justicia

G_M wrote: »

I'm a female by the way!
Sorry? Is that meant to be either an explanation or an excuse?

I think that comment was in response to...

G_M wrote: »

Find yourself a nice house with your wife

Star99_2

Re the female remark, I was responding to the section where you were saying I should buy a nice house with my wife.!

And I don't know if my brother has been declaring this as income to the tax office and if his intention was to avoid paying tax.!

Looks like I need to be having a serious chat with my brother.!
I'm just so angry at the whole thing, just feel like selling both properties and paying the mortgage off and also any tax bills I may now have. But I'm more angry at myself for being so stupid in the first place.!

G_M

Re the female remark, I was responding to the section where you were saying I should buy a nice house with my wife.!

Apologies.

... just feel like selling both properties and paying the mortgage off and also any tax bills I may now have.

Most sensible thing you've said/thought/written so far.

Yes, you've been naive. But that is excusable.

Your brother appears to have been manipulative, selfish, and I strongly suspect illegal. That is not.

Your priority to should be to get completely out of this situation, and as you say, rid yourself of all involvement - legal, financial, credit history, etc.

If that means your brother takes a financial hit, well, not your responsibility.