Keeping LISA when spouse buys a house

underground99

Alexland said:

underground99 said:

However, the use of the term 'legally', talking about the process of divorce law which may never be relevant to you, doesn't mean that as of today you are legally a property owner or sofa owner or bank account owner or car owner or pension owner just because your wife is one of those things.

 I also agree that generally HMT/HMRC don't seem to consider such assets as jointly owned.

Correct, they don't. If you have a jointly owned asset like an investment property or a bank account, HMRC will generally assume 50:50 on the income from it unless you give them a proper form of election to tell them it should be different and you can justify the ownership in unequal shares. Whereas if you have a solely owned asset, HMRC will not treat it as joint and will consider it solely owned with the other person not having an interest. 

That's why people do things like transfer ownership of their shares or properties into their spouse's name or into joint names before selling to be able to make use of each others' CGT exemptions, because if they don't, HMRC will say it belongs to just the one of them who acquired it, and it is not considered joint just because of its being owned within the family unit.

Do you have a reference for this only applying to divorce law? I agree the key point to confirm is if is the joint ownership of matrimonial assets applies during the marriage or only in the event of divorce.

You are the one who came up with the reference, presumably by reading up on some family law firm's website about the process that people go through when when looking at how the courts would consider the issue of financial provision on divorce, which requires the concept of 'matrimonial assets' to be considered.

I've explained why it's a mistake and you are using it in the wrong context, but am not going to go trawling through the statutes and case law to tell you where you got your red-herring reference from, given the reference is a red herring and not useful to OP. 

imho, ianal etc.

Alexland

MovingForwards said:

@SDLT_Geek has covered this a few times on the housing boards

And what is their view or evidence? I wish there was a good reference to make it clearer but then there is the facility in law for married couples to own a property as tenants in common with each having a distinct share of ownership even on a family home which may not be equal so it seems that the joint ownership of matrimonial assets may only apply in a divorce. I just don't feel comfortable confirming it will be fine to the OP so will stop at almost certainly fine.

underground99

Alexland said:

MovingForwards said:

@SDLT_Geek has covered this a few times on the housing boards

And what is their view or evidence? 

Generally as their username suggests, the things that they choose to talk about on the housing boards are the applicability of SDLT rules to property purchases where spouses are involved; which is not the question at hand.

I linked the SDLT manual earlier only to point out that the concept about looking at both spouses even if only one of them is doing a transaction is something specific to a part of the higher rate stamp duty rules to meet a policy objective; it doesn't have a read-across as something with a bearing on the question of whether you personally have been a homeowner in the past, which is the question being asked when you withdraw from your personal LISA to fund your a property transaction).

Alexland said:
so it seems that the joint ownership of matrimonial assets may only apply in a divorce.

Defining the matrimonial assets, for the purpose of dividing up the matrimonial assets, to ensure fair financial provision when the matrimony is ending (on divorce), is something you need to do when divorcing.  It is not something you need to do if someone asks you a factual question about whether you own an interest in a property.

If your wife owns a property and you didn't pay for it and weren't given it, it's hers. If she sells it, the proceeds are hers. If she gets income from the property, the income is hers.  Yes if you are splitting up and there are arguments about what is a fair economic settlement to walk away from the relationship, you would start to look at what assets you own between the both of you and who should get what. At that point a judge might order her to give you some sort of interest in her house or pension or some of her cash.  If nobody has given you an interest in her property when you are asked the question about ever owning property, and you haven't owned any other property yourself, you can say you are a 'first time buyer' for the purposes of the ISA rules.