MOTHER BUYING NEW HOUSE IN MY NAME - Help!

getmore4less

00ec25 wrote: »

ok an issue that should be checked but somewhat unlikely

for Op to prove that he waived all beneficial ownership rights at the point in time that the "part mortgage" was taken out and he was added to the deeds there would need to be Declaration/deed of Trust in place formally waiving those rights

retrospectively creating such a document now would be "somewhat" inadvisable if there is years of expenditure "proving" his interest in the property.

I was not suggesting 0% or 50%.

it may be that the real beneficial interest at purchase was not 50%.

It may have been the intent was 50:50 and there was a gift element at the time.

may not matter with the substantial PRR CGT exposure is low.

00ec25

Izzy_Skint wrote: »

OK, noted on the First Charge, thanks.

What about the last question regarding the £100,000?

Thanks
Izzy_Skint

lets just stick with round sum amounts for now, obviously the actuals will be subject to various deductions for the costs and tax as mentioned

you and your mother own a house 50/50 which you are selling for 450k

your mother's share is 225k less her share of selling costs. She will spend that money on purchasing a new house which is expected to cost 350k. That means she needs approx another 125k (plus her share of buying costs). As the sold property was mother's main home she has no CGT exposure on her 225k share, so gets it all (less selling costs) but cannot buy her new home which she will own 100% without extra funding.

your share is 225k less your share of selling costs (AND any CGT if there is some by the time you've crunched the numbers).

So you have approx £225k of cash available. From that you loan her the 125k she needs from your cash rather than becoming a co-owner of her new house. The remaining 100k of your cash is all yours, it will not "of course become mother's". You can do with it what you want, it is your money, not hers as it is what remains from your share of the sale. There is no further tax to pay on that 100k as you have accounted for that in your CGT calculation.

note that we have referred to beneficial interest throughout this thread. there is a reason for that, it is the principle that underpins tax law, you split the sale proceeds according to your shares (ie your respective beneficial interests) which you say is 50/50. The 100k therefore is the amount you have not spent from your share, since you started with 225 but have only loaned 125k of it to mother.

Izzy_Skint

Hello 00ec25

Thanks again for that well detailed reply

I spoke with a solicitor dealing in property today and it will pan out as you suggested.

I will loan mother £125,000 of my equity to enable her to buy the property and put a charge on it, the property will then be put solely in my mothers name so she only pays lower stamp duty of £7,500.

Your advice has been amazing so thanks again :beer:

My wife brought up a good question which we forgot about!
Before getting married to me she lived with her mother and when her mother died she inherited the property. She then sold that property to buy her first ever property but was charge Stamp Duty. We did question if it was right for her to pay stamp duty but they said because she inherited the property it counts as a first property, does that seem correct to you?

Thanks again
Izzy_ Skint

Pixie5740

Izzy_Skint wrote: »

My wife brought up a good question which we forgot about!
Before getting married to me she lived with her mother and when her mother died she inherited the property. She then sold that property to buy her first ever property but was charge Stamp Duty. We did question if it was right for her to pay stamp duty but they said because she inherited the property it counts as a first property, does that seem correct to you?

Eh? Which rate SDLT is your wife referring to? The normal rate of SDLT everyone pays when buying a property or the additional SDLT?

00ec25

Izzy_Skint wrote: »

I spoke with a solicitor dealing in property today and it will pan out as you suggested.

thanks for the update, always great to see a real outcome on board posts

Izzy_Skint wrote: »

My wife brought up a good question which we forgot about!
Before getting married to me she lived with her mother and when her mother died she inherited the property. She then sold that property to buy her first ever property but was charge Stamp Duty. We did question if it was right for her to pay stamp duty but they said because she inherited the property it counts as a first property, does that seem correct to you?

Thanks again
Izzy_ Skint

partial data repeated second hand never helps....
- she inherited a property.
- she sold that property
- she bought another property

When was the completion?

The Govt did run an incentive scheme for first time buyers between March 2010 - March 2012 where SDLT was waived for first time buyers. The criteria for that were very strict and inheriting and then selling a property would absolutely not have entitled the wife to be classed as a first time buyer for SDLT purposes. Is that what your wife is trying to remember?

since March 2012 anyone and everyone pays SDLT at either the standard rate or additional rate depending on the circumstances. First time buyer status now irrelevant to whether you pay SDLT, inheritance may be relevant in specific circumstances in respect of the additional rate only as explained in the guide referenced at post #23 above...

PS time to change your forum name from izzy-skint to izzy-rich

Izzy_Skint

LOL! I'm not sure about Izzy Rich! Used to be .

Again the advice you gave 00ec25 was SPOT ON! :T
So many forget the importance to return and update but this will hopefully help others in the same situation.

Your right again, my wife did inherit the property so it did count as her first home.

Hoping i can return to help others as you have me.
Thanks again
Izzy