Is tax payable - rent from live in family

lolly111392

Yes because he has a higher income with more disposable income therefore we have been approved for a mortgage for 150k
My mum is not financially able to get a mortgage due to currently being in a debt management plan.
I'm aware of the tax on my current property if I let it out.
My brother wishes my mum to have a place that's stable - since her landlord is very elderly it's likely she will be asked to move out in the near future and only has a months notice which is why he's happy to put down the deposit and go on the mortgage with me for the new property.

We just want to know the tax implications for my brother if my mum is paying rent I.e he wants to recoup his 15k savings he is putting down as a deposit. 100 a month will take 12.5years to pay back.
If he's her landlord but not mine then does that complicate things for me.

lolly111392

Sorry didn't notice - you said buy to let but it wouldn't be a buy to let since I would be living there. I would be converting my current mortgage by getting a consent to let and the new one would be a nomal one.

unholyangel

00ec25 wrote: »

you have expanded on what I said, does not make what I wrote wrong as a warning, merely there was no need to go off on a tangent with detailed explanation

however, since you ask:
https://www.theguardian.com/money/2018/apr/30/my-partner-wants-me-to-pay-him-rent-equity-house

That article says the same thing I did - which is at odds with what you said. I'm confused why you're linking it :huh:

And I'm genuinely sorry (I'm really not doing it to be antagonistic, just my purpose here is to help OPs so sometimes that involves disagreeing with other posts), but what you said is wrong. Taking rent doesn't create a beneficial interest even if you use that rent to pay the mortgage. There needs to be the intention (of the owner) for them to gain a beneficial interest.

I'm also not sure why you think saying to have a written agreement isn't useful advice and is going off on a tangent either. Things would be much easier for courts to sort if more people used them as standard - even with friends or family.

unholyangel

lolly111392 wrote: »

Yes because he has a higher income with more disposable income therefore we have been approved for a mortgage for 150k
My mum is not financially able to get a mortgage due to currently being in a debt management plan.
I'm aware of the tax on my current property if I let it out.
My brother wishes my mum to have a place that's stable - since her landlord is very elderly it's likely she will be asked to move out in the near future and only has a months notice which is why he's happy to put down the deposit and go on the mortgage with me for the new property.

We just want to know the tax implications for my brother if my mum is paying rent I.e he wants to recoup his 15k savings he is putting down as a deposit. 100 a month will take 12.5years to pay back.
If he's her landlord but not mine then does that complicate things for me.

You can agree to split the profits from rental differently for tax purposes but its wise to have a formal agreement documenting it for a dozen or so reasons (at least one of which is HMRC).

You're also looking at purchasing a property so I would say bite the bullet and get proper legal advice. If cost is an issue then shop around - some firms will give a set price as long as there are no major hiccups.