Protecting my parents investment property in a divorce

locotoro

skintandscared wrote: »

Agree with Dunroamin. You say she's never worked - probably because she stayed home to bring up and take care of their children!!! How dare he now try and hide anything of value so she's left with nothing.

You guys should stop making assumptions. The kids were raised on the whole by the grandmother whilst the mother travelled back and forth between the uk and her own country.

I didn't ask the question to be responded to with judgrmental remarks that dont even have half the info. I asked in order to obtain suggestions regarding a delicate situation. On the whole the advice has been useful and the discussion have been appreciated. But comments like this are petty and unnecessary

paddedjohn

Where your friends parents claiming any means tested benefits at all? if so and he tries to claim the property belongs to them and they were renting it out them they could be in the mire.

jamesd

Given the money flow description I think he has a good case that it's really held in trust for the parents. But he's going to need a solicitor anyway for a divorce so he might usefully get started now.

Had the property remained unambiguously owned by the parents there would be substantial capital gains tax relief on any eventual sale, because it had been their own main home so would get PPR and lettings reliefs. But that may well no longer apply due to the maneuvering. Something else that he or they need proper advice on, to try to minimise future bills. Basic position, ignoring the potential trust issues, is that he is liable for CGT for value at sale minus value at the time the property transferred to his ownership.

Also potential income tax issues. Mortgage interest is deductible from rental income, for a mortgage up to the value of the property at the time it was transferred into the letting business. Has anyone been claiming this? Him? The parents? Someone needs to verify that there haven't been significant tax mis-reporting issues to sort out.

If there is no trust here, we possibly have among other things:

1. Below market value (free) property transfer to him. Possible failure to declare potential CGT due and failure to pay that CGT.
2. The potential income tax issues.

If there is a trust, there may have been CGT due at the time the property was placed in trust. I assume that nobody paid that, or even declared it, so the parents may have some tax issues there to sort out.

He needs professional legal advice. Maybe also help from an accountant. Or the parents do. Or both, more likely. You've already had one lawyer tell you that he needs personal advice. I'm not one but that advice is right.

Dunroamin

locotoro wrote: »

That assumption is completely inaccurate.

She came from abroad with no education and no responsibility. They got married and he has lavished her with all the money in his pocket and his parents are constantly buying her gifts. After 15 years of marriage and three kids she has never had a single money worry and is very lucky. considering both me and my wife both earn more than my friend but we both have to work to pay mortgage and she doesn't because of his parents. Turns out shes not as appreciative as she used to be and not having a clue about finance or working she wants more.

Nothing in their situation closely resembles stiching her up. He would quite happily support them if it came to it because of his kids but he doesn't want to jeopardise his parents property.

Additionally when I say the parents own the property I mean that they should own it in equity by virtue of the fact they pay for it and it was their home for 30 years

My view remains the same, if not more so.

She hasn't even had her own home for all those years and she's supposed to be grateful because she's bought a few presents. I hope she goes back to her own country and takes the children with her if they manage to do this to her!

neverdespairgirl

Is this an Indian / Pakistani family? Sounds like it.

Tiddlywinks

locotoro wrote: »

what other alternatives does he have open to him?

Alternatives? Pay for good legal advice rather than asking a bunch of strangers on an Internet forum... and then moaning at responses because posters don't know the full facts of the situation.

Mojisola

locotoro wrote: »

She came from abroad with no education and no responsibility. They got married and he has lavished her with all the money in his pocket and his parents are constantly buying her gifts. After 15 years of marriage and three kids she has never had a single money worry and is very lucky. considering both me and my wife both earn more than my friend but we both have to work to pay mortgage and she doesn't because of his parents. Turns out shes not as appreciative as she used to be and not having a clue about finance or working she wants more.

None of that is taken into account when a couple divorce. They have been a family for 15 years. The split will start at 50/50 with the weighting in her favour if she is going to have their children.

If the house in question really belonged to the parents, why was the ownership transferred into the son's name?

Tiddlywinks

locotoro wrote: »

That assumption is completely inaccurate.

She came from abroad with no education and no responsibility. They got married and he has lavished her with all the money in his pocket and his parents are constantly buying her gifts. After 15 years of marriage and three kids she has never had a single money worry and is very lucky. considering both me and my wife both earn more than my friend but we both have to work to pay mortgage and she doesn't because of his parents. Turns out shes not as appreciative as she used to be and not having a clue about finance or working she wants more.

Nothing in their situation closely resembles stiching her up. He would quite happily support them if it came to it because of his kids but he doesn't want to jeopardise his parents property.

Additionally when I say the parents own the property I mean that they should own it in equity by virtue of the fact they pay for it and it was their home for 30 years

Have I been transported back in time to circa 1900?

'Not as appreciative'? Seriously?

NAR

Tiddlywinks wrote: »

Have I been transported back in time to circa 1900?

'Not as appreciative'? Seriously?

Course she should be. She is a slave bought out of bondage and should be extremely grateful for her lot!

locotoro

Thanks for all your helpful comments.

To those who have hijacked and trolled this thread and turned a simple fact finding mission and an attempt to gather alternative views, I pity you that you have nothing better to do than make cheap comments when not in full view of the information.

To answer some of your jibes
- I put the question out there to gather alternatives - of course he plans to go to a lawyer however its good to know what others would suggest too - that's the whole point of a forum!
- No they are not an Indian/Pakistani family.
- She, in my view, is supposed to be grateful because she doesn't have a care in the world and has lived a life of luxury for the last 15 years. Whereas most people, including me and my wife, have to work hard to enjoy the same standard of living.
- To those of you painting the situation as if its "slavery" or some backwards 1900 family - I would submit that slaves don't have the option of 4/5 holidays a year with the kids looked after and treated like royalty.
- To those saying she should go back to her own country and take the kids. Well I hope she doesn't. I hope for both their sakes and that of the kids that they resolve any disagreement between them and live happily together.

In any event my friend wants to safeguard the inheritance of his younger siblings as the property was paid for by his parents and not by him. I don't see anything wrong with that.

Thanks for the advice from those of you that have been helpful. But its the smart !!!! judgments that turn people away from forums like these.