Gifted deposit to partner

40ish

I am in the process of buying a house with my partner. Due to our circumstances (him; cash rich, asset poor...me visa versa), I am going to gift him the deposit (25 % approx) and he will take out the mortgage on the house covering the rest (75%). 

He is in agreement (in fact is insistent) that we legalise this, in order that if something went wrong and we sell the house, it will be previously agreed who gets what (me: my deposit back, along with a 50% split of what’s left after mortgage paid). 

Anyone dine anything similar and any advice how I can protect myself just in case the worse happens. 

Thanks 

user1977

Before you spend any more time on this, has he checked whether his mortgage lender is happy with the proposal? Normally they expect gifted deposits to be just that, a no-strings-attached gift - but coming from a partner implies that you'd be expecting in return to be allowed to live in the property?

Mickey666

As you are partners why not a joint purchase, in which case there is no issue with any 'gifts' between partners.
Or does the OP already own a property and doesn't want to incur any second home SDLT?

Slithery

40ish said:

He is in agreement (in fact is insistent) that we legalise this, in order that if something went wrong and we sell the house, it will be previously agreed who gets what (me: my deposit back, along with a 50% split of what’s left after mortgage paid).

In that case it isn't a gift.

Thrugelmir

Obvious question. Why are you unable to be party to the mortgage? 

40ish

user1977 said:

Before you spend any more time on this, has he checked whether his mortgage lender is happy with the proposal? Normally they expect gifted deposits to be just that, a no-strings-attached gift - but coming from a partner implies that you'd be expecting in return to be allowed to live in the property?

Yes, it’s all agreed with mortgage provider. I’d be classed as a tennant. 

40ish

Mickey666 said:

As you are partners why not a joint purchase, in which case there is no issue with any 'gifts' between partners.
Or does the OP already own a property and doesn't want to incur any second home SDLT?

I’m going to rent my current home, but if I was on the mortgage, then because of this it would mean that we would incur the additional SD, which we wanted to avoid. 

40ish

Slithery said:

40ish said:

He is in agreement (in fact is insistent) that we legalise this, in order that if something went wrong and we sell the house, it will be previously agreed who gets what (me: my deposit back, along with a 50% split of what’s left after mortgage paid).

In that case it isn't a gift.

Correct. It’s not. 

40ish

Thrugelmir said:

Obvious question. Why are you unable to be party to the mortgage? 

Just because it would mean additional stamp duty, as it would be my 2nd home (as I am going to rent out my current home when we move in).

getmore4less

That's a lousy deal for him

He pays for 75% of the property only gets 50% back

Thrugelmir

40ish said:

user1977 said:

Before you spend any more time on this, has he checked whether his mortgage lender is happy with the proposal? Normally they expect gifted deposits to be just that, a no-strings-attached gift - but coming from a partner implies that you'd be expecting in return to be allowed to live in the property?

Yes, it’s all agreed with mortgage provider. I’d be classed as a tennant. 

Not if you wish to "legalise" the situation. You would need to sign away your rights as an occupier.