Transfer of Equity

rr252

My fiancee is the sole registered owner of the house we live in. 60% of the money used to fund its acquisition came from her mother and 40% is mortgage. I am just in the process of selling my house with the intention of buying into her house. My name is to be added to the title deeds and I will pay my fiance's mother her 60% back in cash. Do I need to pay SDLT (the 60% will be more than 125k and the 80% certainly will be if I have to take half responsibility for the mortgage)? Does it make any difference that the consideration is going directly to her mother rather than my fiancee? Is it worth instructing a solicitor to deal with a transfer of equity? Is it worth arranging for our interests to be held in tenants in common initially (40:60 or 20:80 if the bank insists I take half responsibility for mortgage) or not given that we will be married shortly in any event?

Tom99

[FONT=Verdana, sans-serif]If you are going to be an owner you will need to be party to the mortgage and responsible for all of it if your fiancee did not pay up.

[/FONT] [FONT=Verdana, sans-serif]You could just own the property as joint tenants, particularly since you will soon marry.

[/FONT] [FONT=Verdana, sans-serif]But if you want to protect your share, given the unequal deposit, you need to own the property as tenants in common and have a deed of trust which sets out how you will divide the proceeds when the property is sold.

[/FONT] [FONT=Verdana, sans-serif]It seem you are buying 60% and your fiancee only buying what the mortgage covers but has the property increased in value since your fiancee bought it? Also have they paid back some of the mortgage?

[/FONT] [FONT=Verdana, sans-serif]You need to look at the value now and divide it into three parts, your 'deposit', your fiancees 'deposit' and the mortgage.

[/FONT] [FONT=Verdana, sans-serif]You will need a two part formula, you can't just say you own it 60/40 or whatever.

[/FONT] [FONT=Verdana, sans-serif]For example lets say those proportions are 55%; 10% and 35%

[/FONT] [FONT=Verdana, sans-serif]If you are not going to contribute towards the mortgage then the deed of trust will probably say that on a sale, after paying the sale costs and redeeming the mortgage:

[/FONT] [FONT=Verdana, sans-serif]You: 55% of the Gross sale price (less cost of sale but not mortgage)[/FONT]
[FONT=Verdana, sans-serif]Fiancee: all of the remainder

[/FONT] [FONT=Verdana, sans-serif]If you are going to pay 50% of the mortgage then it will probably say:

[/FONT] [FONT=Verdana, sans-serif]You: 45% of the gross sale price plus 50% of the remainder[/FONT]
[FONT=Verdana, sans-serif]Fiancee: 50% of the remainder.[/FONT]