Securing a loan with a Declaration of Trust

antrobus

GizzaClue wrote: »

... 3 questions: If my parents make a Declaration of Trust regarding the £200k in favour of my uncle does that mean:
1 - my uncle becomes an owner of their property?...

You and your partner are "buying a house with a gifted deposit". Therefore you will be the legal owners of the property. I can see why someone might want you sign a "Declaration of Trust" recognising your uncle's interest in the property. God only knows why some twonk wants your parents to sign one. Unless they're down on the LR as owners it won't do anyone any good.

GizzaClue wrote: »

...2 - my uncle would have to pay stamp duty?...

Not unless he actually buys a property himself.

GizzaClue wrote: »

... 3 - my uncle would need to declare the loan or the equity to HMRC?...

Only to the extent that the loan, equity, whatever, gives rise to any income or profit that is taxable.

jonesMUFCforever

................But a lender requires ''clean'' security so in the event of a default they can get you out without other family members having a claim on the property.

Crystallady

jonesMUFCforever wrote: »

................But a lender requires ''clean'' security so in the event of a default they can get you out without other family members having a claim on the property.

:TThank you jonesMUFCforever
Which is why I suggested the parents give the uncle a legal charge (I said nothing about a declaration of trust!) on their home as it is unencumbered. This would keep the transactions separate and have more chance of being acceptable to the OP's lender.

Thrugelmir

Crystallady wrote: »

:TThank you jonesMUFCforever
Which is why I suggested the parents give the uncle a legal charge (I said nothing about a declaration of trust!) on their home as it is unencumbered. This would keep the transactions separate and have more chance of being acceptable to the OP's lender.

The lender doesn't appear to have been told that the parents intend to make the property their home as well in the future.

Another issue in itself.