How to legally share proceeds of house sale?

Guest101

izboo wrote: »

Primarily because I now have a poor credit score and several debts while she does not (which was the reverse of the situation when we purchased the present house). For that reason (and others) we have always tried to avoid being financially linked but we both have wills leaving our estates to the other person.


Izboo

Yes but you could end up paying IHT on the state. (well the estate could end up paying it, but you know what I mean)


anyway I think there's something missing here. Having some debt isn't that big an issue

izboo

Guest101 wrote: »

Yes but you could end up paying IHT on the state. (well the estate could end up paying it, but you know what I mean)


anyway I think there's something missing here. Having some debt isn't that big an issue

Trust me, the chances of any estate involved getting anywhere near the IHT threshold is extremely unlikely.


You are right, it is not simply an issue of debt. It is simply a question of trying to ascertain how to establish in law that the money I would be paying to my partner was repayment for the money she had lent me to pay the mortgage (whilst I was unable to pay it myself) sufficient to satisfy a solicitor carrying out their money laundering diligence procedure as regards to the source of a mortgage deposit.


The pertinent point here is that we are in Scotland and from what I can gather, unlike in England and Wales, simply being able to prove that someone has made payments towards the mortgage (or improvements to a home) does not automatically give any legal claim to proceeds of any house sale - title being everything.


As such I was simply trying to establish whether, if you like, there was a legal process for formalising a loan after the fact. Our position is that she willingly gave me money when I was in need which I now willingly wish to return to her as she is now in need. It would not be an issue if it wasn't that the returned money will be used almost immediately as a deposit on a mortgage and proof of deposit is now such a big issue (for the solicitors at least, if not for the lenders). Whether a particular lender would or would not accept a gifted deposit in our circumstances is beside the point as what we are trying to establish beyond doubt is that the money would not be a gift and should not be recorded as being such.


Many thanks everyone for your answers and we will of course take our situation to a solicitor in due course but I was hoping that someone might already have first hand knowledge of this issue as there must have been many people using proceeds of a house sale to pay back non-commercial debts.


Izboo