How do I work out living costs with partner?

Grumpy_chap

Morrigan_2020 said:

Was your partner planning to dodge paying tax he owed if it wasn't for the house?

Angela_D_3 said:

It sounds like he's declared £20,000 he hasn’t actually made,  so good old fashioned mortgage fraud into the mix for extra fun.  

I read the OP's posts as the latter.
Neither are entirely palatable.

Perhaps the OP will give some further detail.



Just for the sake of posterity:

finchy_2020 said:

Me and my partner have purchased a house. I was the only one lucky enough to have the deposit to secure the house but being self employed my partner also declared a lot of profit and is paying a huge tax bill so we got a higher value and the house we want.

we are splitting the mortgage and living costs 50/50 and any work that needs doing to the house which can be done by my partner (painting, sanding the floorboards, putting up shelves mirrors etc...) he is happy to do but any major work I’ll be paying for (I have about £25k to spend on the house for when we get a new kitchen, bathroom etc...) my partner won’t be able to contribute much because of his job and Covid he’s not making as much but can afford to pay the mortgage! 

how do we find a common ground to split the house so it’s fair on both parties? If I’ve put down all of the deposit do I own 100% of the house? 

tink_1983

Can you not have a declaration of trust drawn up. The equity in my jointly mortgaged home is mine, 75k of it. The DOT outlines that if we split and sell any equity over that 75k is split 50/50.

[Deleted User]

I don't think its helpful right now to murmur about possible fraud.  That's just judgment which is not going to help if they have already purchased the house.  

However, knowing what legal agreements between the OP and her partner were made is vitally important.  The fact that the OP is wondering if paying the deposit means they own 100% of the house indicates to me that urgent enquiries as to who owns what if they split need to take place with their conveyancer  to explain things like this, and a legal agreement made between the OP and her partner.  I am surprised this hasn't already been done.  But maybe they haven't exchanged yet?  A common arrangement seems to be house cost - deposit then divide the remainder of the value by 2.  But that isn't taking into account the value implications of what may happen over the years with the OP's partner doing work, and other things being paid for by the OP.  

Slithery

deannatrois said:

I don't think its helpful right now to murmur about possible fraud. 

Why not? The OP has already admitted it.
Either the partner actually earned the extra 20k and wasn't going to declare it unless they had to. That's defrauding the HMRC. Or they didn't actually earn that much and have only declared it to support a larger mortgage application, that's defrauding both HMRC and their lender.

Grumpy_chap

deannatrois said:

 A common arrangement seems to be house cost - deposit then divide the remainder of the value by 2. 

Which is exactly this:

tink_1983 said:

Can you not have a declaration of trust drawn up. The equity in my jointly mortgaged home is mine, 75k of it. The DOT outlines that if we split and sell any equity over that 75k is split 50/50.

Unfortunately, deannatrois said:

I don't think its helpful right now to murmur about possible fraud.  

I agree is not helpful, but the OP really needs to know the true position as if they've borrowed against income they don't have, it is not far from real problems.
As you say, we really need the OP to give further information as

deannatrois said:

knowing what legal agreements between the OP and her partner were made is vitally important. 
urgent enquiries as to who owns what if they split need to take place with their conveyancer  to explain things like this, and a legal agreement made between the OP and her partner.  

Marvel1

finchy_2020 said:

we are splitting the mortgage and living costs 50/50

If I’ve put down all of the deposit do I own 100% of the house? 

This alone is serious alarm bells!  Very worrying for your partner.

Grumpy_chap

Slithery said:

deannatrois said:

I don't think its helpful right now to murmur about possible fraud. 

Why not? The OP has already admitted it.
Either the partner actually earned the extra 20k and wasn't going to declare it unless they had to. That's defrauding the HMRC. Or they didn't actually earn that much and have only declared it to support a larger mortgage application, that's defrauding both HMRC and their lender.

In fairness, I would be surprised if HMRC took much action if you fraudulently paid too much tax...
Unless there is a scheme to over-declare 2019-20 to secure the mortgage and then "cook the books" for 2020-21 to reduce by that same amount.  That would be very calculated deception.

I wonder whether this whole scheme was the idea of the OP and OP's partner, or whether there was someone who gave them this advice - either a mortgage broker or Accountant or IFA.  If there was someone giving advice, I hope that someone has good PI cover.

finchy_2020

Marvel1 said:

finchy_2020 said:

we are splitting the mortgage and living costs 50/50

If I’ve put down all of the deposit do I own 100% of the house? 

This alone is serious alarm bells!  Very worrying for your partner.

Why is that worrying?

Grumpy_chap

finchy_2020 said:

Marvel1 said:

finchy_2020 said:

we are splitting the mortgage and living costs 50/50

If I’ve put down all of the deposit do I own 100% of the house? 

This alone is serious alarm bells!  Very worrying for your partner.

Why is that worrying?

Because to date you have paid 15% of the value of the house and somehow make the maths work to owning 100%.

finchy_2020

Thanks for all the comments - most of them are pretty stupid in regards to what I’ve declared... I’ve not declared as many possible expenses to keep my overall profit up, most people do it - banks know they do it, HMRC know they do it... it’s extra tax in our taxpayers pocket. Mortgage payments with current rates are about £550 each per month so why are there comments asking how we could possibly afford this? It’s quite simple and wasn’t the question. 

We have a tenants in common document which shows that I own 60% and my partner owns 40% but he’s not put any physical money into the house... I have?