Will having a share in an American property affect FTB Help To Buy ISA bonus?

Karen's_girl

Hello,

My American ex-partner (who now resides back in the USA) owes me money but does not have the cash in order to pay me back, so a Deed of Trust is in place in the USA which stipulates that when his house in the USA is sold, I will get a share of the house proceeds. It is not likely that the house will be sold for a few years yet. I have two questions about this situation:

1) Within the next two years I wish to purchase my first house here in the UK. I have been contributing to a Help To Buy Isa for almost 4 years and have never had a share in a house in the UK. Considering the situation with the USA house, will I still be classed as a first time buyer here in the UK for HTB Isa purposes?

2) When the USA house is sold, will I have to pay tax in both the USA and the UK, on the proceeds ?

Thank you.

sheepy21

First time buyer stipulates owning property anywhere in the world, so you won't get the bonus and you'll have to pay stamp duty

stevenhp1987

1) You have an interest on a property and therefore are not a first time buyer. As you are not a first time buyer you cannot use a HTB ISA or a LISA for your purchase.

2) No idea on USA taxes, but you will pay tax to the UK on it. https://www.gov.uk/tax-sell-property/selling-overseas-property

silvercar

Not sure if this counts as a loan secured on the house or whether you own a share of the house. if the former then arguably you don't have an interest in the property, if the latter then you do.

Tom99

When you say 'a share' do you mean x% of the sale price or xUS$? It could make all the difference.

00ec25

1. if you precisely mean a deed of trust then it is very probable that means you are legally a beneficial owner of the property and therefore are not a UK FTB
If the US legal system views deeds of trust differently (which I doubt given they are based on UK law practices) then it is possible you have a loan security as others mention and thus no underlying ownership
you need to check

2. there is a double taxation agreement between US and UK. You will not be taxed twice. In vastly over simplified terms, the total tax you will pay in money terms will be whichever is the higher of the 2 countries amounts, but that may be split between a bit to one and the rest to the other.

Karen's_girl

Thanks all for your replies; much appreciated.

The Deed of Trust is with a Promissory Note, as security for a loan. I have just re-read the email from the USA attorney and he states that the Deed of Trust and Promissory Note is a lien interest; the 'interest' is not ownership of the property, but purely a monetary interest in the property.

steampowered

It sounds like you have a debt secured against the property, rather than an interest in the property.

Though if the debt is calculated as a % of the sale proceeds that might muddy the waters.

00ec25

Karen's_girl wrote: »

Thanks all for your replies; much appreciated.

The Deed of Trust is with a Promissory Note, as security for a loan. I have just re-read the email from the USA attorney and he states that the Deed of Trust and Promissory Note is a lien interest; the 'interest' is not ownership of the property, but purely a monetary interest in the property.

so it appears you are indeed still a FTB as all you have in the USA is a repayment plan secured by a charge over an asset

in no way is that the same as being an owner of the asset

Karen's_girl

Great; it seems that I will still be deemed to be a FTB.

Thank you for your help - I appreciate it.