Help...i need guidance how to split profit

kitkat76

tom9980 wrote: »

Well if he doesn't own the property and was not on the mortgage or deeds he technically gets the money he put in back and no more, I don't however think that is the moral answer.

I would give him all the money he gave back and 50% of the remaining profit, this assumes all costs and taxes like capital gains have been paid.

This what I thought in this case ie proceeds less expenses from buying, to refurbishing and other incidental costs to selling fees, less his 30k deposit. anything left thats what is profit? share ratio to be determined.

mildredalien

He may want all of it, but you own the house and without any paperwork about what each of you get back you'll have to come to an agreement you can live with!

Where did the 18% number come from? If that was the previous verbal agreement then as you say stick with £45k plus 18% of the remaining profit and hope he comes around. However if you want to maintain your relationship with your father with less potential for conflict then perhaps 50% of the profits after the deposit and all expenses/taxes would be fairer - after all there wouldn't be any profits if it wasn't for his £45k.

kitkat76

mildredalien wrote: »

He may want all of it, but you own the house and without any paperwork about what each of you get back you'll have to come to an agreement you can live with!

Where did the 18% number come from? If that was the previous verbal agreement then as you say stick with £45k plus 18% of the remaining profit and hope he comes around. However if you want to maintain your relationship with your father with less potential for conflict then perhaps 50% of the profits after the deposit and all expenses/taxes would be fairer - after all there wouldn't be any profits if it wasn't for his £45k.

thanks for the reply. yes, the 18% was an initial verbal agreement (which he's denying now)
I have always thought that I pay him back his 45k then he will get 18% from profit.which he in this case he will get about 68k in total.

But obviously now he wants all of it and just wants to give me an amount which I dont know what he has in mind.

AnotherJoe

Plus 50% happens to be how much the property rose in value so it's another reason to use that as the figure.

The issue, as I said earlier, is, is your dad prepared to go to court over this ? Because as it stands you can give him whatever you deem fair as you have the money.

So I think you need to convince him that splitting the remainder 50/50 is fair which may be difficult if he wants it all. You said he is "ill" is that general poor health or is it dementia of some sort? I only ask since he seems to have forgotten the 18% (a strange figure where did that come from?) you say you agreed. Because if dementia, you'll have an impossible job convincing him of anything.

glasgowdan

Not sure how he thinks he has the right to demand all the money, very confusing.

I'd look to pay both of your costs, then 50/50 the rest.

G_M

Well done - pleased to hear you've accounted for Capital Gains Tax.

Hopefully you've done the same for Income Tax on the monthly rent?

And you've paid back the various loans you received - the £45K.

As for the rest, as others have said there are various solutions. Which is most appropriate depends

* what exactly you think was agreed intially
* what exactly he thinks was agreed intially
* how you bring those 2 beliefs together
* how close you are or how much emnity there is between you
* your attitude to family
* your attitude to moral obligations
* your personalneeds
* his personal needs
etc

From a legal stand-point I believe you received some loans which you've repaid. You've also sold a property that was yours and yours alone. So the matter can end there.

But as my list above indicates, the moral stand-point may be very different:

He put up all the required purchase funding; you put up nothing.
He added funding when dificulties arose; you added nothing.
You took out all the income; he took out nothing.

Go figure!

kitkat76

AnotherJoe wrote: »

Plus 50% happens to be how much the property rose in value so it's another reason to use that as the figure.

The issue, as I said earlier, is, is your dad prepared to go to court over this ? Because as it stands you can give him whatever you deem fair as you have the money.

So I think you need to convince him that splitting the remainder 50/50 is fair which may be difficult if he wants it all. You said he is "ill" is that general poor health or is it dementia of some sort? I only ask since he seems to have forgotten the 18% (a strange figure where did that come from?) you say you agreed. Because if dementia, you'll have an impossible job convincing him of anything.

I dont think he will go to court over this but I just want what is fair for both.
We are in the process of getting him assessed for mental capacity and dementia. Him forgetting the 18% is very daunting. he came up with it and no idea how he did came up with it.

Thanks

kinger101

Whatever you decide, if you can find him in a condition where he has mental capacity, I'd get him to put in writing that any settlement you do make is final. Get this witnessed.

G_M

If he is certified not to have mental capacity, then a Deputy will be appointed, to act in his best interests.

You will then have to reach agreement with that person.

see
http://www.mind.org.uk/information-support/legal-rights/mental-capacity-act-2005/

If he is not certified, then the legal assumption is that he does have mental capacity - so you will have to agree with him.

silvercar

How old is Dad? If elderly and has sufficient money to see out his days, then some inheritance tax planning would be useful. Not much point giving him 50k only for the tax man to take a chunk before it comes back to you!