HELP PLS - Temporary transfer of ownership / mortgage - Tax questions

rexmedorum

Maybe I'm missing something: but why did you decide to use such a complex construction and put it all legally through solicitors if it's you are all living at the property? Would it not have been much more sensible to take care of the running without any legal change?

househunt

@rexmedorum - Fair point.  Because when she became unwell and was struggling to cope with the stress of having a mortgage, it was impacting her recovery.  I guess in all honesty we kind of panicked, didn't know what to do and we took the drastic steps without thinking.  Therefore this time, we're trying to ensure we don't make the same costly mistake twice.

rexmedorum

househunt said:

@rexmedorum - Fair point.  Because when she became unwell and was struggling to cope with the stress of having a mortgage, it was impacting her recovery.  I guess in all honesty we kind of panicked, didn't know what to do and we took the drastic steps without thinking.  Therefore this time, we're trying to ensure we don't make the same costly mistake twice.

That's good. I think it may help to seperate the transfer of ownership & clearing of the mortgage.

By the way unfortunately your son will probably have lost his first-time buyer status, but that can't be helped now, so just something to keep in mind and look into whenever he buys, rather than stress over now. 

househunt

Thanks @rexmedorum.  Sorry, but can you please explain what you mean by separate the transfer of ownership and clearing mortgage?  If she only has lump-sum money to put towards the property, but no job, surely she can't takeover a mortgage, hence the bank won't transfer ownership to her.  Or am I misunderstanding what you're saying?

Yes, your right that he's unfortunately lost his first-time buyer status, but I'm hoping that we can eventually help him towards his deposit to purchase his own property, but right now he's not interested in owning anything.

rexmedorum

househunt said:

Thanks @rexmedorum.  Sorry, but can you please explain what you mean by separate the transfer of ownership and clearing mortgage?  If she only has lump-sum money to put towards the property, but no job, surely she can't takeover a mortgage, hence the bank won't transfer ownership to her.  Or am I misunderstanding what you're saying?

Yes, your right that he's unfortunately lost his first-time buyer status, but I'm hoping that we can eventually help him towards his deposit to purchase his own property, but right now he's not interested in owning anything.

I just mean to focus and complete on one first. If the transfer may be a problem with the bank, it may be simpler to clear the mortgage first (provided you trust eachother enough to funnel the lump sume through one of you). Get a redemption statement so you know exactly how much is needed. If you sign up for notificationswith the land registry you should get an email when the bank releases their claim with them.

Afterwards you can deal with transfer of ownership, without needing to worry about the bank!

househunt

Trust isn't an issue.  However I hope you can forgive my ignorance, but I don't understand how my wife who is not on the mortgage can clear her son's mortgage without an actual ownership transfer taking place simultaneously.

Unless what your saying is that my wife pay our kid to clear the mortgage totally and then do the transfer of ownership???  

user1977

Anybody can "clear the mortgage" if by that you just mean transferring the money into the mortgage account. It's a bank transfer like any other, the lender won't care who it's from (beyond the usual money-laundering checks that banks might have).

househunt

Thanks user1977.  Regardless of the issues we've had, I've still continued to pay the mortgage every month anyway by bank transfer to my son and it's then gone out of his account.  So I guess I could ask her to send a lumpsum directly to clear the mortgage and if banks ask where, then that's actually clear-cut as it's money from a settlement.

Once we do this, then we can later transfer the property ownership back from him to her, am I right?

user1977

Once the mortgage has been redeemed you can do what you like with the ownership.

househunt

Thanks very much.  In that case, all my questions have been answered so thank you to all of you for easing my mind.  Really appreciate all your help.