Splitting up advice appreciated

Kayalana99

Errata wrote: »

There will be tax implications for both of you. Are you currently declaring the rental income to HMRC?

Thier is no rental income at this time as its all 'what if' but would have to be done.

chesta

DS4215 wrote: »

From the sounds of it there are no kids involved - is this the case?

Without kids it heads towards 50:50 depending on the length of the marriage and the assets you brought into the marriage, but you need legal advice.

That's correct. We have been married over 10 years and both had pretty much nothing when we did get married.

krlyr wrote: »

I agree. Think of yourself as a tennant.
So if your mortgage was, say, £1000 a month
You decide to rent the house out for £1500 a month to cover mortgage and bills (look around at other room ads for an idea of what's reasonable to charge though). This means you and husband get £750 each, splitting it half and half.
Everyone pays £500 (or you could scale it on room size, e.g. largest room £600, medium £500, smallest £400) - so you're paying £500 for your room (which you can put straight to the mortgage as your half) and pocketing £250 from the other two tennants, and the remaining £750 from the two tennants goes to your husband. However, he needs to contribute his £500 to the mortgage (if he wants the benefits from keeping the house, he needs to cough up for the mortgage too), so out of the deal he only gets £250 too.

Just bear in mind whether you'd have to change your mortgage to a BTL to rent it out - with you living there, they'd likely be classed as lodgers, but you might be charging enough that it becomes a taxable income.

Also consider things like expenses - say the boiler needs replacing, do you pay for it or does he pay half? As landlord to the other two tennants, it's his duty to maintain the property too - and as I said, he wants the benefits he has to take the responsibilities alongside it too. If either (or both) tennants move out, will he make up half the shortfall until the rooms are filled? Lots of issues to complicate the matter so definately put a lot of thought into it, and consider some kind of formal tennancy agreement of some kind to cover your back.

That's brilliant logic! And would mean he ends up with about £150 a month. I think he should get some benefit but didn't think it should be 50:50 if he's not contributing anything to the mortgage. Any repairs to the house would come out of a special joint account to cover that, and we have jsut spent a lot on it so nothing should need doing, touch wood.

I've considered the tax, which wouldn't be much as the two rooms wouldn't get much more than you're allowed to make through renting a room (the house is in a very cheap area), and we don't have to change the mortgage luckily. I'm not renting the rooms yet but as soon as I do I'll declare the extra income.

chesta

Kayalana99 wrote: »

Ok so say mortgage is £2000

and your saying renting out two rooms would get you £2000

Which means that he needs to pay £1000 and you need to pay £1000. But he wants compensation for you living in his house so...

Imgaine your renting every room so total rent is £3000 coming in with a £2000 mortgage you would both get £500 each out of the house.

So techinally you should be paying him £500 which is half of your rent for your 50% but whilst the others are paying the mortage payment

I feel like I should understand this but I'm confused!

Kayalana99

Sorry just try and imgaine that your not living thier and all three rooms are being rented out...what ever money is left after the mortgage would be spilt between you and your ex-partner 50/50 what ever he would get is what you should be paying

..Ive never been good at explaining things.

I guess its same as what the other guy said but a backwards way of looking at it lol

Mojisola

krlyr wrote: »

Just bear in mind whether you'd have to change your mortgage to a BTL to rent it out - with you living there, they'd likely be classed as lodgers, but you might be charging enough that it becomes a taxable income.

You won't need to change your mortgage to BTL unless you both move out and rent the house out.

If a lower income would be enough, look at the tax-free rent-a-room scheme.