Separation - buying a second house

jayykayy

My wife and I are going through an amicable separation and she and the kids will be staying in our family home which is jointly owned. I need to get a new home and would much rather try to buy than rent - is there any way of doing it that is more efficient from a tax / stamp duty perspective? We don't intend to divorce any time soon, and I'd be just as happy to buy in joint names as just in my own, but I'm not sure if there would be the second home stamp duty regardless, or if there's anything else I need to consider.
Thanks in advance for any help!

celblog88

Are you intending to finance both homes independently of one another? If yes then I would suggest you both have properties in sole names and decides who owes who how much. The reason for this is any 2nd place of residence will be subject to capital gains tax. If you are both paying into the marital home and you purchase another for yourself prior to having your financial separation agreed, she will have a claim over that as well as the marital home. My advice would be to make a decision what way the current home will be utilised/kept(until kids are older)/sold and get a financial separation agreement in black and white before putting any further assets in your name. 

BJV

1st sorry to hear about the separation, it is never easy and I hope never to find out just how hard it can be. Good that it is amicable. But as pervious post said do the financials 1st. It is amicable now but what happens if you meet someone. What happens if she meets someone? What happens if it is no longer amicable. Nice people do horrible things when money is evolved. So take the possibility of you both doing something you may regret later and sport the financial aspect out. Good luck. 

pphillips

Reading your post, it sounds like you are separating from your wife but are considering buying another house jointly with her, this makes absolutely no sense if you intend to divorce.

The most tax efficient way of buying another house is to get divorced and agree a financial settlement with your wife that results in her being the sole owner of the matrimonal home.

If you still own part of the matrimonial home or if you are still married, then you'll need to pay the 3% additional stamp duty.

celblog88

Agree with BJV. Currently going through the process myself and in my experience things are only amicable when I'm doing everything the other party wants me to. In my case she was actually the one who first went to solicitors and asked for financial discovery, only to blow her lid when my own solicitor asked her for details on a 2nd property she owned with her sister. Your situation sounds amicable now but as stated once the money stuff starts it doesn't take long for one side to get their backs up. Get your matrimonial separation agreement drafted up and that way down the line there is no confusion or retrospective claim over this and that as it's in black and white. This is the best way to protect you and the kids' interests. 

jayykayy

Thank you for the replies so far - I don't suppose it would really change the advice, but some additional info:
- this is a mutually agreed trial separation - our first choice is that our differences are resolved and I move back in (so logically I should probably rent, but I don't want to ever be a tenant again!) Realistically, the chances of us getting back together are 50/50 at best, so as BJV says above - finances first, but divorce isn't on the horizon in the short to medium term.
- The current plan if we don't get back together is to sell the family home when the kids are older and split everything down the middle. I have no issue paying the mortgage until then - I am and have always been the primary earner, but the most important thing is that the kids have the security of staying in the home they have grown up in.
One other thing - the family home will be worth at least 3x what the one I will buy is.

celblog88

Understood but trial separation is still a separation and if there is a chance you will get back together it seems daft buying another property, whether it's worth 1/3 or 1/10 of the family home. Take this time during the trial separation to work on yourself, enjoy doing new things, gym/friends etc. Don't be left in a situation where at the end of a trial period your left with a permanent separation and having to start all over again. Make the most of what you have and can do for the time being rather than reflecting on have nots and should've dones. That's the best advice I can give you. Good luck

Stvo8

Hi All, sorry for jumping in on this thread but seems to have some good information being passed around and my situation is similar except I am not married to my sons Mum.
I am currently awaiting meetings with a Solicitor and Mortgage advisor but I wold be very grateful of a bit of info/help.

I will try and breakdown the key facts;

Not married or in a civil partnership but have been cohabiting for 10 years+ in England

Now separating (I moved out 4 months ago and have continued to pay all the household bills whilst I stay elsewhere)

We share an 11 year-old child together (CSA not an issues as this is black and white financially)

Almost 9 years into the mortgage, due to remortgage in 2 months time.

Ex wants to stay in the family home until our son is 18 (in 7 years) which she says her solicitor has said I have to continue paying the mortgage for the duration of this time. She is willing to split the mortage payments in half which is a bonus for me as up until this point I paid the mortgage alone, it is a joint mortgage in both our names.

I will be needing to find(purchase) my own home shortly and have no deposit so my issues is this.

I will be needing to use my half of the equity as my deposit, do I

A - need to sort this through our remortgage on the current property and release equity from the property which will obviously increase our payments which she will not be happy about.

Or

B (obviously the preferred option) – Can I remortgage the property now and at a later date when I find a suitable house use my half of the equity as a ‘deposit’ on my new house that is currently part of the equity towards our family home?

 

Some basic numbers for easy calculation

House Purchased for £150,000

Currently worth £200,000

Mortgage owed £100,000ish (51% LTV)

Thanks in advance.

castle96

always remember someone saying to me "never NEVER, NEVER trust ANYONE when it comes to money". Has proved true several times in my life !

letthemeatcake

stv;

Unless you sell the property and divide the equity so she can buy a place for herself and her Son, with her getting an affordable mortgage in her sole name on top, you would both have to remain  on the mortgage and both be responsible for the current mortgage payments . So any missed payments affect both of your credit ratings and could lead to repossession. You do not need to pay her household bills but do need to pay child maintenance.
 
 If she wants to remain in the property and your ex can afford all of the current mortgage repayments by herself,the mortgage company would have to agree she can afford the mortgage on her own before taking your name off of the mortgage. You would then be free to buy a place of your own. However She would probably see the property as hers and would not want to give up any equity at a future date.

You could rent with you both sharing the mortgage payments and then sell and divide the higher equity at a later date or when your Son reaches 18 but of course this makes it difficult for you to afford to buy in the meantime.

Hopefully your solicitor can give you some answers and find a way forward.

anotheruser

castle96 said:

always remember someone saying to me "never NEVER, NEVER trust ANYONE when it comes to money". Has proved true several times in my life !

And yet, millions of people seem to do exactly that.
Maybe it's you that can't be trusted?
Or maybe your dis-trust creates trust issues...
Just a thought.