Stamp Duty

Legacy_user

Hello
I hope someone will know the answer to this.
Last year, my brother offered my daughter a deposit of £68,000 for a house to live in with her partner and their baby but my daughter's partner (not married), on a salary of £44,000 had utterly failed to secure a mortgage as he had hidden debts and pay day loans which he had concealed but which were uncovered by the mortgage company.
In desperation, my brother gave the £68,000 to me and I took out a mortgage for 140,000 to cover the remainder of the purchase price of £208,000.
As I already have a house and only a nominal income, I was only able to take out a buy to let mortgage and rent the house to my daughters partner so as to comply with the mortgage rules.
As I already have a house and the mortgage was buy to let, there was Stamp Duty to pay which came to £7000. I explained to my daughters partner and his father that I was unable to find this money so as I was taking on the responsibility of the mortgage and the repayment of it, would the family on his side be willing to help. My daughter's partner agreed to borrow £6,000 from his father which, when he had got himself a better credit rating and was able to buy the house from me for them as a little family, he would take out his own mortgage enough to repay his father the £6,000 as well as paying for the house. My mother gave us the remaining £1,000. It is clear from all the legal paperwork that my brother's deposit and my mortgage paid for the price of the house. It was clear that this extra money was for Stamp Duty.
Sadly, my daughter's partner became abusive and after a year of hell, I had to ask him to leave and gave him 2 months notice and we were faced with a position in which my daughter and her baby were going to be homeless as she is a full time Mum and I dont have an income to pay the mortgage and the DWP said they would NOT pay the rent as she is a relative. This was a terribly stressful situation and we didnt know what to do. A case was made to the DWP and they have agreed to pay the rent because of the individual circumstances, so now we have a safe secure home for my daughter and granddaughter to live in.
My daughters ex is now threatening to take legal action to recover his father's £6,000 which he claims, despite all the legal paperwork, is 'in the house'. He claims a charge can be put on the house and he says he has taken legal advice and that we as a family owe his father £6,000 and that it is held in the equity of the house. The partner was the one who borrowed the money from his father, the money was paid into my bank account to pay to the solicitor along with all the legal fees. I dont believe we owe him the money, but believe that his son owes his father the £6,000. we dont believe that we are responsible for the breakdown and end of the relationship which has resulted in the partner having to leave the house and thereby not having the opportunity to buy it. We believe he is the one who is responsible for this situation as he concealed so much information and told so many lies. Does anyone have any insight into this? i would be so grateful for some peace of mind.Thank you

AdrianC

You borrowed £6,000 from somebody to pay your tax bill arising from your purchase of your rental property.


That "somebody" then went on to be your tenant at that property. He has since ceased to be your tenant. This is not particularly relevant, except insofar as he is now asking for his loan to you to be repaid. The fact his live-in partner is related to you is not relevant, not least because she was not on the tenancy.

So, yes, you owe him the £6,000 he lent you to pay your tax bill arising from your purchase of your rental property.


Where and how your tenant obtained the £6,000 he lent you is irrelevant. Whether that tenant may have been intending to later buy the property from you is also irrelevant.

G_M

Oh for goodness sake! In a nutshell:

1) you bought a BTL house in your name, using
a) £68K gift from your brother
b) £140K mortgage in your name
c) £6K from your daughter's boyfriend which is now the basis of a dispute
d) £1K gift from your mother

2) you let the property to your sister's boyfriend

3) I shall skip the questions about tenancy law, HMRC, tenancy deposit etc and assume all above board

4) boyfriend was asked to leave, so question 1 is
Q1 - did you end the tenancy properly?
Q2 - did you grant your daughter a new sole tenancy?

5) Assuming yes to both Qs I'll move on:

6) morally it seems clear - boyfriend put £6K into the property. You should repay it

7) legally is less clear. Was the £6K a loan? A gift? What?

8) if you intend to ignore 7) above, let him sue, defend as best you can, and the court wll decide.

Sorted.

AnotherJoe

Tell him you'll pay him (say) £2k to drop his claim.
The alternative is a costly and expensive legal case he may lose and have to pay costs as well.

supa34

I dont want to sound like the negative people you get on here but with him earning 44k and not able to get a mortgage and pay day loans etc, didn't the alarm bells start ringing?

Back to your problem. It boils down tee stanp duty and what you agreed. End of day you took the mortgage and it's your stamp duty bill you paid, so you owe him the 6k. I know it's frustrating but other thing you can do is go back to square ones, daughter moves out into another place, you sell the property and give the cash back. Let's say you sold the property and made a profit. Would you give that back to him?

Main issue Is you were lucky. If property has been in his name then you would have had a bigger problem with daughter and I would be answering about brothers gift. Who did he gift it to? Currently it looks like you, but if it was under exs name, would he want his "gift" back?

Its very messy and not something you want in court. See if he settles for 3k if not just give the 6k and draw a line under it.

System

Thank you for your replies. I must add that at the time of buying I told both my daughter and her partner clearly that as I don’t have an income to speak of , Infact, out of five people in the situation I was the one with the least but the only person who could get a mortgage, I said If I take on this house I am only a vehicle to get you into a house and cannot in anyway be financially disadvantaged as I have no means. The house was only bought by me for them to live in and I never intended to be the person to make any financial gain from the house and charged the partner only the basic costs to cover mortgage and insurances. I even took out a loan of £3,000 in my name to get them a new central heating boiler so they were warm and I was the only one who could get a loan. Yes, everything was done correctly and yes my daughter has a new sole tenancy agreement. And yes alarm beeps were well and truly ringing for me but he promised he would never take out any more payday loans and would sort himself out financially and the plan was that in two years they would buy the house from me. I would make no profit and all would be sorted. I since found out that he took out 4 more pay day loans , lied and lied about it to my daughter and when she could see the money wasn’t adding up each month he faked soreadsheets and showed them to her and his father to make out my daughter was going mad and said she was making it all up in her head. He was vile, gave her the silent treatment, pushed her around, he even tried to drive off when she was getting the baby out of the car. You can see why I had to ask him to leave. I did it correctly and gave him 2 months written notice to comply with the law.
I feel like I’ve been taken to the cleaners, had my pants pulled down and totally been used and let down by the actions of this partner. All beciase I tried to help them in their desire to have a secure home. He is a callous man and yet I still remain courteous to him when he picks up the little girl who is now 3 on his access visits or drops her off to my house when necessary. I would do anything for my little granddaughter but just don’t have and sources to repay any money least of all £6,000.
Sorry to ramble on but thank you for listening.

AdrianC

The fact remains that if he does launch a small claim for the £6,000 he lent you to pay your tax bill, he will win.

The rest is all background, but doesn't actually affect the bald reality.


As for pleading poverty and "being used"... you own a £200,000+ BtL property. Yes, there's a £140k mortgage against it, but that property is a £60k+ asset, and could/should be producing a gross income of ~£10k/year.


I suspect you did not tell your BtL lender that the £68k was a loan from your brother, but an outright gift?

anselld

Taken to the cleaners??
You have a £200k property which has been financed (with the exception of your 3k) by your relatives, the tax payer and your daughter's ex.

I appreciate it is a problem if you do not have 6k to hand but that doesn't change the overall position that you have benefitted significantly.

macman

You have both income and assets: the rental income and the £60K equity in the property. So to say that you do not have the resources to repay him is absurd.
Your argument is basically that he has no moral right to be repaid because of his behaviour. That may well be the case, but in law that is irrelevant: he has a totally valid legal claim.

chunkytfg

All I would add is that I would not be offering him the money. I'd be offering it to his father. I wonder if the father even knows what his son is demanding in his name?!

G_M

chunkytfg wrote: »

All I would add is that I would not be offering him the money. I'd be offering it to his father. I wonder if the father even knows what his son is demanding in his name?!

By all means offer it and give it to his father.

But ensure you get a statement from the ex that he consents to the money owed to him being paid to his father, and that he no longer has any claim on the property.


You received the money from the ex, not his father.