Is it possible to buy a large property with family and then split it?

michael_p_4

Hi all

We're considering embarking on a bit of an unusual house move, and would really appreciate any help/advice you might have. We're looking to buy a large country property with family, and split it up into separate parts which will all become our primary residences. Basically, the property divides up into:

Main house
Self-contained "flat" for holiday lets (but part of the main house)
Cottage and stables

There are four parties involved, and the intention is to split the property (and payment) as follows:

One party buying the majority of the main house (and paying 45%)
One party buying the remainder of the main house (paying 15%)
One party buying the self-contained flat (20%)
Final party buying the cottage and stables and renovating (20%)

One party (us) will need to keep our existing mortgage, which is 25% of the overall price and half of our share of the overall price. The others are cash buyers.

What I'd really like to know is:

1) Has anyone here ever heard of anything similar being done before?

2) I believe a mortgage company will only provide a mortgage if the names on the trust deeds match the names on the mortgage. The solicitor suggested that we either:

- do a joint purchase, tenancy in common, and all put our names on the mortgage
- have the mortgage and deeds in our name only, with some legal record of their investment (I wasn't at the meeting so not sure on the technicalities of this)
- buy as a company (not sure on this one)

Once the purchase is through, we would then split the deed into four new deeds. Can a deed really be split when a mortgage is secured against it? And can the mortgage then be "re-issued" for our section? Are there any taxation issues that we should consider?

3) I can find precious little information on splitting the deeds. We're informed by the solicitor that this is a straightforward process, however the cynic in me thinks that someone who gets paid by the hour would say this! Would the council not have ultimate approval, i.e. would it need planning permission?

Appreciate any advice/suggestions.

Cheers

Michael

epz_2

my folks considered it about 30 years ago, financialy it makes very good sence as you get a lot more for your money.

legaly i dont know much but if it were me and dealing with family i would structure it with some sort of holding company which everyone would own a share of, do the buildng work etc but not tell the council so you only get hit with one council tax bill etc

Doozergirl

You would definately need planning permission before you split the deeds as apart from the issues around selling in the future, you wouldn't be able to get a mortgage secured on your section without it. However, splitting the deeds itself wouldn't be a major concern.

I would apply for that PP before you bought the house.

michael_p_4

Thanks for the replies.

Epz, thanks for the idea - however, wouldn't that mean we would lose main residence relief, even though we'd be living there?

Doozergirl, that is a good point. We had a builder friend who has done this before inspect the property, and he felt it wouldn't be a problem, however I agree that without PP we shouldn't exchange - we have an architect/planner who will be taking care of this, so hopefully it should be resolved soon (is that blithe optimism, any ideas how long planning permission to divide an existing residential property takes? The only information I can find relates to flats, which I'm not sure would be the same situation).

When you say about getting a mortgage secured on our section (after PP and the deeds are split), would you have a recommendation on how we proceed up until then, with regard to the mortgage that one of the four parties (us) needs?

Thanks for your help.