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

Mojisola

Star99 wrote: »

With regards to the cash, he said he has two other investors, so the three of them purchased the property jointly.

That isn't your problem. If the house is in your name, it belongs to you. Sell it and use the money to sort out the problems your brother has landed you in.

gfplux

I have reflected on this "strange situation" and I now begin to wonder if it is at all true. How could a grown women agree to such things. How could her husband let her.
Is the original poster a troll?

Star99_2

cte1111 wrote: »

Re your Mum's (your) house, if you lived in the house when you took the mortgage out, then you will not have any CGT to pay. You will have Principal Private Residence relief for the period that you lived there, plus the last 3 years of ownership. As it is less than 3 years that you moved out, the whole period of ownership will be covered by PPR.

So that's one less small worry. However, as you want to get a mortgage for a home of your own, you need to 'sell' this house. I would give your Mum and brother an ultimatum - either your brother gets a mortgage and buys the house from you, or you put it up for sale. If you can't do this, then you and your husband will have to give up the idea of your income counting towards a joint mortgage.

The other flat, the gain is currently looking about £20,000. If you transfer the flat into joint names with your husband, then 'sell' it to whoever at the current market value, the gain will be under your CGT limits, e.g. you will both have a capital gain of £10,000, the limit is £10,600 so you will have no tax to pay.

You will still need to declare these gains on your tax return and claim the appropriate relief. It sounds like using an accountant would be a good idea.

Thanks for the info on PPR. I looked on the HMRC website which supports this, so yes, at least that is one small worry.

Brother 2 came round yesterday (the one who lives in my mums house with mum), and he seems to have agreed to take the house in his name and asked me to make an appointment at the bank. I have called the bank this morning and made an appointment for next weekend.
We both bank with them and my mortgage is also with them, so fingers crossed they give him a mortgage.

If for any reason, my brother getting a mortgage is not successful, then I will tell my mum she has one month to do something, and failure to do so will result in me selling the house with them still in it. I can do that right? (I recall someone posting I could, but have scanned all the posts and can't seem to find it now).

Re brother1 flat, I'm not too sure what to do re the rental income he has been getting. I don't want to say I have been receving rent when I haven't. Can I get him to declare it as income that he's been receiving or can I not as the flat is in my name?

Star99_2

katherina wrote: »

Did your brother come round and are you okay? I'm sorry I have no advice but I have read your comments and I hope it all works out for you.

No, brother 1 didn't end up coming surprisingly. He didn't call me either.

And thank you for your concern. When I first read your post earlier, it actually made me cry. I can't believe a complete stranger cares more than my own so called family. A family that I've done so much for like the mug that I am.

And thanks to everybody for all your advice and kind words. I really do appreciate it.

RAS

Regarding the house mum is in, could you and OH and baby not move in there if brother cannot get a mortgage and he move out.

Whether you agree to let mum stay is another matter, but frankly is she "gifted" you half the value I would do that if OH was OK?

RAS

Star99 wrote: »

Re brother1 flat, I'm not too sure what to do re the rental income he has been getting. I don't want to say I have been receving rent when I haven't. Can I get him to declare it as income that he's been receiving or can I not as the flat is in my name?

No you cannot do that. You own the house so you are liable for the tax even if he has been taking the income.

Also you are liable if he has failed to meet any of the landlord's responsibilities like Gas certificates and deposit protection. You can be fined pretty hefty sums if he has fouled up (not likely but possible).

Given that the tax deadline is January 31 and that not only do you need to get the return done but you also need to pay the tax by then, he needs to find the money to pay your tax liability by and pay it by January 31. After that the fines start to wrack up.

JimmyTheWig

Mojisola wrote: »

That isn't your problem. If the house is in your name, it belongs to you. Sell it and use the money to sort out the problems your brother has landed you in.

We know that the OP's brother is far from honest.
What are his associates likely to be like?
Not sure I'd want to upset people like that.

JimmyTheWig

Star99 wrote: »

Brother 2 came round yesterday (the one who lives in my mums house with mum), and he seems to have agreed to take the house in his name and asked me to make an appointment at the bank. I have called the bank this morning and made an appointment for next weekend.
We both bank with them and my mortgage is also with them, so fingers crossed they give him a mortgage.

Why did _you_ make an appointment for your brother to go to the bank?

shop-to-drop

I'm wondering if the flat was purchased in your name as a first time buyer to avoid paying stamp duty initially? If so may end up being an expensive mistake trying to sort it all out and pay the other tax liabilities now due on it.

Hope you manage to sort things out without it messing up your own future. Taking control now and not leaving it to your brothers is essential but I imagine you realise that now.

notanewuser

shop-to-drop wrote: »

I'm wondering if the flat was purchased in your name as a first time buyer to avoid paying stamp duty initially? If so may end up being an expensive mistake trying to sort it all out and pay the other tax liabilities now due on it.

Hope you manage to sort things out without it messing up your own future. Taking control now and not leaving it to your brothers is essential but I imagine you realise that now.

Stamp duty would not have been due on a £30k flat?