Getting ex wife to pay her share of expenses on shared propery which is rented out

jgh

TheSilentMeow wrote: »

As of April 2016 tax is now applied to turnover and not profit.

Yes, but, as you say, from April 2016. So, when you submit your tax return for the 2016-2017 tax year sometime in late 2017. Currently, for the 2015-2016 tax year which is what you'll be paying tax on when you submit your return sometime in late 2016, you'll be paying tax on profit.

TBagpuss

gingercordial wrote: »

Then my advice would be that he commences the process to get one. As you may know the financial order is separate from the divorce - the divorce ends the marriage, but does not end the financial ties and responsibilities. Not having a financial order is a huge liability for you both. What if she becomes disabled and can't work, so claims maintenance? What if you inherit something or win the lottery and she wants half? Or in the future wants to claim his pension? Unless you have a financial order everything is still up for grabs.

If she is willing to come to an agreement this can be done by drawing up a consent order, and with the house being involved you would need a solicitor to make sure the wording does what you intend. If she won't come to an agreement then he will need to ask the court to decide, and that will unfortunately cost more. Even so, it will cost less than leaving it without one has potential to cost you.

As he has since remarried, he may not be able to. You lose your right to make an application for a finacial order when you remarry. If he was the Petitioner in the divorce and ticked the right boxes about financial orders he may still be able to proceed.

It would still be open to him to seek an order for sale under ToLaTA, but it may not be worth doing that while the property is still in negative equity. If his ex hasnt remarried *she* could start an application for a finacial order following he diovrce and once it was before the court, the Judge could look at the full range of options.

I the two of them came to an agreement then the court could still approve a consent order. It may be that his best bet is to try to reach an agreement with her - perhaps for her to cooperate with a sale, and then for him to try to work out whether he can afford to pay off the negative equity or to negotiate with the lender to accept a reduced figure.

booksurr

silvercar wrote: »

I hope she has been declaring half of the rent as income to hmrc. Even if making a loss it should still be declared.

unmarried owners can split the income anyway they want to. Just because you are a legal owner does not automatically mean you have to take "your" share unless you are married (or have a formal partnership business share documented)

The ex may have a claim to it if she wishes to force the issue via the court (unlikely given it's a loss), but for tax purposes the default 50/50 split no longer applies since the divorce (subject to the special rule in the actual year of the divorce)

OP - looks like you husband's best solution is to get a financial order. Take whatever hit that produces in terms of impact on pension etc and ensure that the house is dealt with as part of that settlement. Continuing to plough money into a loss making letting in the hope that you will recover all money paid out in the future (less whatever share the ex "remembers" she wants when she finds it has sold for a profit) is madness

Mossfarr

What about your husband asking his ex to relinquish her share of the house and transfer the property over to him? You could then consider moving into it until the value/equity balances out again. At that point you could sell it and move on.
You must be paying rent or another mortgage where you are living now so surely this would be a better option?

nkkingston

we let the property and every month have to pay an extra £101 on top of the rental income, out of our own pockets, to cover the mortgage repayments,

Can you not raise the rent a bit?

Guest101

nkkingston wrote: »

Can you not raise the rent a bit?

Or sell! Not much of an investment.

tlc678910

Hi OP,
I have noticed a poster has estimated that you might need to pay around £230 a month for 5 years in order to borrow and clear the negative equity for a sale.

I appreciate your partners ex morally owes half but if she is unable or unwilling to pay the reality is that your partner will be chased for the full amount.

We don't know the total value of the house or where it is which makes a difference as a 250K house in a desirable area will likely regain that shortfall quickly rather than a 70K house in a less desirable area. Have you got any clues to how the market is recovering?

Is the house on a repayment mortgage? If your tenants rent is helping pay £300 a month off a repayment mortgage that will clear the negative equity in around 3 and a half years. If their rent was £600 20% tax on the whole amount would be £120 a month (but it won't be that much because you will still deduct expenses and mortgage interest at basic rate and as you are subsidising the place there must be deductions to be made) plus you have your subsidy/ expenses to find.

In short my guess would be it will cost you less to pay back the negative equity through house price recovery and mortgage payments if you are on a repayment mortgage.

You could do with the house signed over to your partner and a contract that releases their exes claim on it for the kick back of not having to settle the negative equity (or that financial settlement) so that when the house is out of negative equity and becomes an investment your partners ex cannot claim half of the equity.

Good luck
Tlc

Thrugelmir

TheSilentMeow wrote: »

every month have to pay an extra £101 on top of the rental income, out of our own pockets, to cover the mortgage repayments,

With interest rates at the levels they are. Presumably the mortgage is on a repayment basis and therefore the debt is slowly reducing.