Transfer of ownership

Manojgrg

Hi everyone
This is my first time posting on MSE forums. I hope I am on a right section.

Being a single mum, I could not secure mortgage to buy a house on my own. Therefore, my brother and sister in law bought a house for me on mortgage two years ago and I have been living there ever since. Every month I transfer money to my brother's bank and he pays his monthly mortgage with it.

As the remortgage date is approaching near, we are considering to transfer the deed to my name if remortgage is possible on my own. My question is 'Would it be considered as a gift to me from my brother?' I think there will be SDLT to pay if I am not mistaken. What would be the best approach to transfer the deed?

Any suggestions will be very helpful and highly appreciated.

Thanks in advance.

G_M

1) your brother should be declaring his rental income (you are paying him to live in his house!) to HMRC. If not - tax evasion.

2) Is your brother complying with all the other many legal requirements of being a landlord? see below.

3) are you now able to get a mortgage in your own name? If so, you can buy the property off your brother.

4) your brother cannot simply transfer the Title of the property into your name if he has a mrtgage on it. And you cannot 'take over' his mortgage - you need a new one in your name.

5) yes, if you buy the property, SDLT will apply.


* New landlords: advice, information & links

getmore4less

Hope your brother and SIL have declared your payments to them.

What has changed so you are able to secure a mortgage now?

Cakeguts

Your brother and sister are your landlords. What they use the money that you pay them for is nothing to do with this situation which is that you are their tenant and they are your landlords.

Your brother needs to have been declaring the income that he gets from you on his tax return and at the same time he also needs to have been doing all the things that a landlord needs to do.

You cannot transfer any part of the property to you without informing the mortgage company. The mortgage company will not allow him to do this because they have got their loan secured on that property. The whole property.

If you want to own the property you will have to buy all of it from your brother. So you will have to get a mortgage in your name to pay for it.

Cheeky_Monkey

Just out of interest, did your brother and SiL get a BTL mortgage or a residential one on the basis that they were 'supposed' to be living there?

00ec25

to repeat the above:
- brother is receiving income. That has to be declared for income tax purposes. Whether he has any actual tax to pay depends on his precise tax position and how much of the mortgage interest he can claim against his rental income.
- you cannot take over the property. Brother must clear his mortgage in full himself before any change in ownership can occur. If you pay money to him you may, or may not, go over the SDLT threshold and have to pay SDLT on your purchase of the property.


and to add to the above

- brother has never lived in the property therefore brother will be liable to pay Capital Gains tax on the difference between what he paid to buy it and what its current market value is. Does not matter what you pay him, you are related to him, so the tax is based on market value, not the cash changing hands.

G_M

This is, I suspect, one of those situations we see here from time to time, where a family member generously helps out another, without either of them first considering the legal, financial, and personal issues that can (and usually will) arise to bite one, the other, or more likely both, on the backside later on.

SDLT_Geek

It sounds unlikely given the facts, but it is worth checking just in case the arrangement from the beginning was that your brother and sister in law bought the property on trust for you.

That is unlikely because of the mortgage arrangements.

Who provided the funds beyond the mortgage debt? Was a declaration of trust signed?

Cheeky_Monkey

I doubt very much that the OP will be back to answer any questions as she hasn't received the replies she wanted