buying an investment property with my son

moneylover

I wonder if anyone can advise please
I would like to buy an investment property with my son. I would be paying my 50% with cash, my son would fund his share with a buy to let mortgage and circa 20% cash. One broker has told us we both have to go on the mortgage and that only a mortgage up to my 75th birthday could be granted. I am currently 67 so that would only be an eight year term which is insufficient.
Is there any way around this? We thought of doing the property in just my sons name and using a deed of trust to indicate my share of the property and percentage of income I should receive. However, if we did this I am concerned that HMRC might see it as tax evasion if the house is only in my son's name at the Land Registry since he pays tax at higher rate and I pay basic rate. Plus, when we sold our capital gains tax rates would differ and that might raise the same problem.
Thanks

Dave_Ham

Subject to the details, have a look at other lenders/brokers.

Potentially there are lenders that will go well past one applicants 75th birthday including I suspect the one he/she is referring to..

Good luck

Wh05apk

If you are a first time landlord some lenders restrict the term to 75, however, assuming you are looking at interest only on a btl, the term really is irrelevant in terms of repayments, so go for 8 years now, then after the initial deal ends, you could remortgage as an experienced landlord when most lenders are more flexible.

moneylover

thank you both. But there is no way the mortgage can just be in my son's name if we buy together even though my share of the purchase would be entirely in cash?

Wh05apk

If you are gifting the money, then possibly, but if you are retaining a claim over the property as it sounds like you are then unlikely.


Can I just confirm who will be living in the property? is it going to be a buy to let?

moneylover

Wh05apk wrote: »

Can I just confirm who will be living in the property? is it going to be a buy to let?

Thank you for your help.
Yes, it will be a buy to let. I am all cash my son needs a mortgage for part of his share. We could apparently have a mortgage until my 75th birthday but that might be storing up problems for the future. We might want to keep the flat which probably wouldn't be possible and it might turn out that it was a bad time to be a seller.
The reason I want my name on the title deeds is because I want half the income. And am concerned that if I am not on the title deeds my ownership might not be recognised by HMRC. In this case the income would be taxed at my son's marginal rate not my basic rate.
We thought about a deed of trust which would be okay by me but HMRC might not accept that and we would then still have problems with tax. It just seems safer to be on the title deeds.
Hilary