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Two family properties in my name, need to buy own home - tax/mortgage implications?!
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I didn't even think about the tax implications. It was one of my other brothers that mentioned this to me and I got so worried I went and saw an accountant asap for advice as I was so frightened.!
If my brother hadn't made me aware of this, I probably would have sold the flat and given the proceeds to my brother an then found myself in trouble with the tax office.!
I mentioned the tax implications to my brother (the one who owns the flat) a few weeks ago and his response was: "that's true" (as thought this hadn't crossed his mind)
"But don't you worry about that. If you get a tax bill, I'll take care of it." (he seems to think there won't be one)
And yes, I do agree he has been greedy and selfish, didn't give me one thought. I feel like reporting him to the tax office, I'm that mad at him.!0 -
And yes, I do agree he has been greedy and selfish, didn't give me one thought. I feel like reporting him to the tax office, I'm that mad at him.!
He gave you a property, so he hasn't been that greedy, or selfish. I think it may be a tax swindle, possibly on laundered funds, or on funds that haven't had tax paid on them. If this is the case, he certainly won't want the police involved, so rest assured, you should be fine.
Sell up, take the money with you (it is your flat after all), pay any tax due and move on, is my opinion. The only tax I can see here is Capital Gains tax, as you've not actually made any money out of the rental.
Your property, your money, and he should have thought about that in the first place.
CK💙💛 💔0 -
You've either gone along with proof of ID to buy the property to the solicitors or he's stolen your ID and taken it and used it.
Which is it?0 -
Complicated situation this, the biggest issue being a potentially family splitting dynamic. I am not sure advising the OP to sell and pocket the cash is the best advice. So here is what i would do.
1. Family meeting. Tell Brother 1 your angry you have been used in this way and that fraud is being committed in your name with all risk being put on you.
2. Tell brother that the solution is to declare the rental income and pay all the tax due, he should also pay any fines/costs of doing this.
3. Only then agree to sell the flat and until 2 is complete you wont be signing or agreeing to anything, and that any attempt to sell the flat covertly will result in legal action to reclaim the property/cash which you will then keep as it is as things stand!
4. You own half of your mums house and the bank the other half because of the mortgage in your name. who is paying the mortgage in reality??? get brother 1 to buy it from you and to take this over.
You need to stress to your family that you own the flat and half the house and that is the reality and there is nothing they can do should you choose to screw them. However you wish to be reasonable and that all you want is out of the situation with no loss to yourself so that you can build a future with your young family.
You are in control now you own the flat and half the house amounting to most likely 100k+!!!!!! worst case you can easily pay off HMRC for tax owned and be sitting pretty but family hating you. Best case your brother realises he is a prat and does 1-4.When using the housing forum please use the sticky threads for valuable information.0 -
Can I just transfer my mothers house into my brother 2's name for the mortgage amount?The fact remains “mother’s” property is in your name, you own it and its original cost was what you paid for it when you got a mortgage to give that money to your mother. It may or may not have increased in value since then but you must declare its sale to HMRC any pay any CGT due.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.!
As far as the rent and income tax thereon is concerned, you are the only legal owner, you thus owe income tax if you made a net profit after deducting all the allowable expenses – you really need professional advice as you are exposed all over the place.0 -
It's more complicated than you think.!
My mum and brother 2 who live in my mums house were supposed to be paying the mortgage. But being the mug that I am, the mortgage has been going out of my account, so my mum and brother owe me thousands on mortgage as I have been paying this for nearly a year and a half.!
I've been asking my mum and brother 2 to sort her house out and take it into brother 2's name for nearly a year now, but they're both dragging their heels.!
I'm currently on maternity leave, and if I decide not to return to work when this ends, the mortgage!amount that me and my husband can get will be considerably less than what we will be offered now. So I really need to get this sorted asap.!
Plus it's causing problems between me and my husband as we cannot get a decent mortgage solely on his wage.!
My family don't seem to care about my situation and aren't doing anything to remove the properties from my name. So I'm reaching that point where I feel like selling both properties and to hell with them.!0 -
This is all so complicated and such a big fat mess. I don't know how I can sort it in by the end of Feb.!
When I saw the accountant for advice, he said all I need to do is sell my mums house to my brother 2 and he pays off the existing mortgage with a new mortgage.!
Re brother 1's flat, he said if I transfer/sell it to brother 1 for the amount it was purchased for, that should be ok.!
So neither of the above is straightforward it seems. So am I liable for CGT on BOTH properties?!0 -
This is all so complicated and such a big fat mess. I don't know how I can sort it in by the end of Feb.!
When I saw the accountant for advice, he said all I need to do is sell my mums house to my brother 2 and he pays off the existing mortgage with a new mortgage.!
Re brother 1's flat, he said if I transfer/sell it to brother 1 for the amount it was purchased for, that should be ok.!
So neither of the above is straightforward it seems. So am I liable for CGT on BOTH properties?!
And if they say 'Sorry we don't want to buy' ?0 -
You are liable to CGT if there has been an increase in value in either property (assuming they are sold to connected persons).
Is brother 2 in a financial position to get a mortgage to purchase the property that mother lives in from you?
If you sell the other house to brother 2 then if he has improved the property its fairly likely to have gone up in value. Therefore it won't be the price you sell it to him that matters, it will be the open market value of the property that will determine if you have made a profit and if you will need to pay CGT.
You need to get tough with the family. I'd suggest you tell your family that you need to sell both properties now. You are happy to sell to brother 2 if he can arrange a mortgage within the next 4weeks, if not you will put the house on the market.
Tell brother 1 you need to sell the house. You will have it valued by an estate agent. If he can find a friend within 4 weeks who will buy it from you for the amount that was paid plus any resultant tax bill then you will sell it to that friend. If not you will put it on the market.A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0 -
Brother 2 graduated just over a year ago and has struggled to find a job since.!
He is currently in employment and has been in that job for about 3months now.
My mums house is still the same, so I should think the value of the property will be similar to the surveyors valuation which was done a year and a half ago when I applied for the mortgage.!
The mortgage amount I took out for my mum was 40k. The house was valued at 70k. The 30k deficit was noted as a gift deposit from my mum to me.!
Re CGT, isn't that only payable on your second property?!0
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