joint savings and stamp duty

mrdarcy86

Hi

I am buying a house in my name, first time buyer. Part of the deposit is coming from joint savings with my girlfriend who is a home owner and will be living in the property.

Would lenders require her name to be on the contract - hence higher stamp duty?

Many Thanks.

G_M

If you meet the lender's income (etc) requiremnts for a mortgage in your sole name, no.

Just say you have savings of £X.

Is your partner happy to (give? lend?) you this cash without any ownershiprights?

mrdarcy86

Thanks G_M.

I meet the income criteria by myself. The reason I am asking is that some lenders would require name of person providing a gift (as part of deposit) to be on the contract.

In my case it's a joint savings account. So wondering if the lender would see it as the same.

My partner is happy for me to use the money.

00ec25

you are not married so the higher rate SDLT cannot apply as long as she has no legal or beneficial interest in the property. If you want to belt and brace it then get your conveyancer to do a deed of trust in which she renounces any claim to any share of the proceeds from the house when it is sold. In other words she legally documents the fact she will not get her money back so has no beneficial interest and thus no basis for being liable for SDLT

naturally when you finally marry the situation will alter...

mrdarcy86

My partner will be living the the property. Does this constitute a beneficial interest?

00ec25

mrdarcy86 wrote: »

My partner will be living the the property. Does this constitute a beneficial interest?

no

a beneficial interest means does she get a share of the sales money when the property is sold. It is a yes / no situation.

if she gets her deposit back then she could be held to be a beneficial owner or, depending on how convoluted you choose to make it, you might be repaying a loaned deposit. Of course in that case your lender will need to know the deposit is in fact a loan, not a deposit...

ask your solicitor, that is why you are paying them for legal advice.

YouFind4Us

Basically, if the house is going to be in your sole name then nobody will ask where the cash has come from, it will be classed as your savings and the solicitor will ask you to prove you have it before completion. You can probably get a great deal as a first time buyer so may be best to weigh up how much cash you would gain or lose if the was on the deeds.

If your gf is going to be a shared owner then it isn't a first time buy and there will be a 2nd home stamp duty to pay. And on top of this if you were to split she would have no rights to the property without a legal battle to prove it. Good luck!

mrdarcy86

Thanks 00ec25. I spoke with the Solicitor. According to them, since my girlfriend owns a property already and she will be living with me in the property I am buying, then higher stamp duty is due.

I've explained that she's not my wife or civil partner, but they argued that we're in a relationship and in the eyes of HMRC would be could considered as one.

So it seems that the issue of lender requiring her name to be on mortgage/contract for contributing a gift is irrelevant.

Is this not accurate?

da_rule

If it is solely your name on the transfer deed then your solicitor is wrong.

Also, I have never known of someone who is gifting a deposit (or part of the deposit) having to be a party to the mortgage deed. They normally just have to sign a gifted deposit form which says that the money is definitely a gift and that they have no interest in the property.

If she is going to be living with you then they may also ask her to sign an non-owning adult occupier form. This will basically be her agreeing that should she acquire a beneficial interest in the property (there are some circumstances where an adult occupier can acquire an interest in the property) it will rank behind the mortgage company's interest and she will not prevent them going into possession of the house.

agrinnall

mrdarcy86 wrote: »

The reason I am asking is that some lenders would require name of person providing a gift (as part of deposit) to be on the contract.

I very much doubt if this is true at all. If it was then people receiving gifted money from their parents, grandparents, siblings, strangers in the street, etc., would need to have those donors named on the mortgage contract, and that simply doesn't happen.

PS If your username is an accurate reflection of your gender then it's impossible (at the moment at least) for your girlfriend to be your civil partner, unless you are in the Isle of Man.

mrdarcy86

@agrinnall it's just a nickname haha, what I meant is "my girlfriend or my civil partner" not that she is my civil partner . The key point here is that the person providing the gift (in my case joint savings account) will be living the property, so it's a bit different from your examples.

@da_rule thanks for the clarification. I've read other threads indicating that lenders sometimes require the name of the person gifting the deposit to be on the mortgage if they will live in the property. And as a consequence, they would want the name to be on the deed as well.

The cases that I read however, were specific to gifted deposits (or part of it) but not joint savings account. Hence my initial question.