Help !! it’s complicated !

Lockie15

It’s complicated 

So myself,husband and my parents brought a property outright in 2011 we have lived in this property since

 due to tax implications and advice from

Solicitor my parents are signing over their share of the property bit by bit we ( me and my husband ) on paper currently own 25% each and another share will go on in April so within 2 years we will own property outright and their names will come off the land registry 

The house needs a lot of work so we are looking to loan £80000 over around 25 years the house is currently valued at £270000

We have been accepted by multiple lenders until they check land registry and see it’s in me my husband and my parents name and say it would need to be a 4 way loan 

My parents are both over 60 and not looking to get into any further financial agreements 

Is there anything we can do as I don’t think the work needed can wait a further 2 years 

sparelogin

You'd need to buy the house entirely but that will depend on whether your affordability stacks up for the required borrowing (not loaning).

PRAISETHESUN

You won't get an unsecured loan for the amount you are talking about. I also don't think you'll get a mortgage for your renovations without all owners being named on the loan agreement either. Short of you buying your parents share, I don't think there is much you can really do. 

Herzlos

Your options are:

1. Take ownership of the entire house and remortgage
2. Get a mortgage with all 4 names on it
3. Do the work in smaller stages as you can afford it.

(What's the benefit in signing the house over slowly? I don't think it makes sense for inheritence tax because any portion of the house not handed over outside the 7 year window would be inherited anyway and it'd be safer to just do it all as early as possible).

phillw

Herzlos said:

(What's the benefit in signing the house over slowly? .

I'm assuming capital gains tax, keeping the tax on the disposal within their annual exemption.

If you absolutely can't wait, then you could borrow the money to pay their tax bill on top of the repair money & get them to sign it all over now.

[Deleted User]

Lockie15 said:

It’s complicated 

So myself,husband and my parents brought a property outright in 2011 we have lived in this property since

 due to tax implications and advice from

Solicitor my parents are signing over their share of the property bit by bit we ( me and my husband ) on paper currently own 25% each and another share will go on in April so within 2 years we will own property outright and their names will come off the land registry 

The house needs a lot of work so we are looking to loan £80000 over around 25 years the house is currently valued at £270000

We have been accepted by multiple lenders until they check land registry and see it’s in me my husband and my parents name and say it would need to be a 4 way loan 

My parents are both over 60 and not looking to get into any further financial agreements 

Is there anything we can do as I don’t think the work needed can wait a further 2 years 

Who is the “we” who live in the house? You and your husband or you, your husband and your parents? How is transferring the house but by bit helping to reduce tax? I can almost see that if your parents don’t live in the property then there might be a CGT saving although I’m not entirely convinced and there would have been a far smarter way of setting up the purchase. 

kimwp

Are they giving the shares to you or selling them to you?

enthusiasticsaver

I am not sure why signing the house over in this manner saves tax tbh but if they are named on the deeds they will have to be named on the loan. If they live in the house but not named on the deeds they will still need to agree and sign to say that they are ok with you borrowing against the property but they won't need to enter into the financial agreement but obviously they need to understand if you default on the loan/mortgage the bank can repossess the property. As you are considering a 25 year mortgage they are too old anyway to be named on the loan. 

 I think you need to clarify with the solicitor why it was purchased in this way and explain you can't borrow against it unless it is in just your and your husbands name so can it be transferred over earlier and what are the implications? Surely if it was bought in 2011 and you live in the property it is exempt from CGT and house prices have not risen that much anyway. I cannot see why inheritance tax would come into it either. It could just have been purchased in your names and be considered as a PET with no tax implications if your parents lived for 7 years which they have anyway?