Stamp Duty -> Remove name from title deed

Sensory

I jointly own a leasehold property with my mother (mortgage free), i.e. under Proprietorship Register, we are both listed as proprietors, and there are no restrictions. My name was added to the title deed soon after I turned 18 for reasons unknown (I intend to ascertain the specifics), but around that period of my life we had recently escaped from a violent domestic situation, and the sale of the former family home facilitated the purchase of this current property (we rented briefly in the interim).

My mother now lives in the property alone (it's a small one-bedroom terraced house), and I live with my husband in rented accommodation. I understand I'm no longer considered a first-time buyer. I believe my husband is still considered a first-time buyer for the purposes of using his personal LISA bonus, but with respect to all other aspects of purchasing property, we are not considered first-time buyers, which excludes us from all relief and schemes available to first-time buyers (e.g. SDLT relief, Shared Ownership).

We intend to buy our first property together within the next 18 months. Am I correct in assuming I must remove my name from the title deed of the property I currently own to avoid the purchase being considered an additional property (thereby incurring significantly higher SDLT)? Is there anything else I'm missing that needs to be considered?

[Deleted User]

Sensory wrote: »

I jointly own a leasehold property with my mother (mortgage free), i.e. under Proprietorship Register, we are both listed as proprietors, and there are no restrictions. My name was added to the title deed soon after I turned 18 for reasons unknown (I intend to ascertain the specifics), but around that period of my life we had recently escaped from a violent domestic situation, and the sale of the former family home facilitated the purchase of this current property (we rented briefly in the interim).

My mother now lives in the property alone (it's a small one-bedroom terraced house), and I live with my husband in rented accommodation. I understand I'm no longer considered a first-time buyer. I believe my husband is still considered a first-time buyer for the purposes of using his personal LISA bonus, but with respect to all other aspects of purchasing property, we are not considered first-time buyers, which excludes us from all relief and schemes available to first-time buyers (e.g. SDLT relief, Shared Ownership).

We intend to buy our first property together within the next 18 months. Am I correct in assuming I must remove my name from the title deed of the property I currently own to avoid the purchase being considered an additional property (thereby incurring significantly higher SDLT)? Is there anything else I'm missing that needs to be considered?

I think this is one of those cases where it would be worth paying for professional advice to determine whether you can claim that you are not a beneficial owner of the property or not. If you attempt to DIY this and simply transfer ownership you could set yourself up with a CGT bill instead. See this other thread from someone else in a similar situation.

https://forums.moneysavingexpert.com/showthread.php?t=5861337

Sensory

Ouch, well this is potentially messy.

I never financially contributed to the property as I had only just finished my A Levels and had no income, and the mortgage was paid off within a year of purchase (due to the sale of the former family home).

It was my main residence until August 2016. After this, I started paying council tax at my current rented address with my husband, and my mother started receiving single person discount. The property has never been let out or used for business purposes, and I’ve never received any ‘rent’ from my mother.

For all intents and purposes, I really should be a first-time buyer, but I’ve accepted that I’m not. Having to pay any sort of tax just for removing my name from this title deed would be solely punitive as it appears I’m caught in red tape and not part of the intended scope of the tax.

I suppose I will just have to speak to my mother and then seek professional advice. Any additional insight is appreciated.

davidmcn

I don't think we can advise further until you've found out why you were on the title in the first place. If you had just turned 18 I presume it wasn't to help with mortgage affordability?

Sensory

davidmcn wrote: »

I don't think we can advise further until you've found out why you were on the title in the first place. If you had just turned 18 I presume it wasn't to help with mortgage affordability?

After having spoken to my mother, it was so I could easily inherit the property in case anything happened to her; it was an unsettling period for us and she hadn't managed to finalise a will yet. She didn't want the freeholders to automatically gain ownership of the property and leave me homeless (I may have been 18 but I wasn't independent). Her solicitor at the time advised against adding my name to the title deed.

My mother was 56 at the time of purchase so I can only assume Barclays allowed the mortgage application because she was able to prove that her share of the proceeds from the future sale of the former family home would be sufficient towards repayment. I think the sale was a 60/40 split between her and my father, with her additional 50% share being due to me continuing to live with her as a dependent. The sale allowed the mortgage to be instantly repaid in full.

xylophone

After having spoken to my mother, it was so I could easily inherit the property in case anything happened to her; it was an unsettling period for us and she hadn't managed to finalise a will yet. She didn't want the freeholders to automatically gain ownership of the property and leave me homeless (I may have been 18 but I wasn't independent). Her solicitor at the time advised against adding my name to the title deed.

It seems to me that your mother had the full and declared intention of joint tenancy, thereby making you a gift of an interest in the property.

I don't understand the reference to the freeholders - surely, if your mother had died intestate and unmarried and you were her only child, the property (albeit leasehold) would have come to you anyway?

It seems odd that the solicitor didn't simply advise making a will.

If you remove your name from the deeds, under the above circumstances you would surely be making a disposal for CGT purposes?

You would be best advised to check with your solicitor.

Sensory

At the time just after the mortgage was paid off, my mother was separated but still legally married to my father, and I also have two older sisters, both of whom had (and have) their own properties.

It’s palpable my name being added to the title deed was inappropriate as it has only caused numerous cumbrances and there are unavoidable legal implications regardless of what my mother actually intended. Had I known then what I know now, I would never have agreed to it; I wish my name was never attached to the property, and I wish it could be removed as if it were never there. I never contributed financially and never benefited in practice.

I’ll be arranging an appointment with her solicitor to determine the best course of action. I may just have to eat the higher SDLT if it proves the cheaper option.

Tom99

Sounds like your mother gifted you the property to stop your father or your older sisters from inheriting it.