Moving In With Partner

p00hsticks

WYSPECIAL said:

p00hsticks said:

WYSPECIAL said:

SavingPennies_2 said:

What do she think? Cos if I was her I'd be thinking I'd be going from owning my own property to owing half/part of a property, whereas you would be going up to having one and a half properties, that puts you in a stronger position. If you intend to buy together in a few years anyway, why not move in pay towards food/ bills but nothing in terms of mortgage. Then you both still own a property, then in a few years you can both sell and jointly own somewhere together.

I see your point but our thinking is she currently owns half a property (approximately) and the other half is owned by the mortgage lender.

No, she owns a whole property and owes a mortgage lender a sum of money.

If you wish to replicate this arrangement , then lend her enough money to pay off the mortage and get a charge put on the property so that you get the money repaid when the property is sold.

The you still each own a property, the mortgage is paid off, there are no SDLT or CGT implications for you and your loan is protected.

That’s the idea. I’ll either buy half and we’ll be joint owners or I’ll lend her the money so she is mortgage free. 

My query is around what the cost implications in term should of stamp duty, cut etc are with each. 

We’re both happy with either solution but want it to be as cost  efficient as possible.

If you lend the money then you don't own the property so no SDLT to pay.

If you buy half the house then you'll be liable to pay SDLT (at the enhanced rate because you already own a property) on the purchase - there wouldn't be any CGT liability on the sale if you live in it for the whole period that you own it.  you will be potentially be building up a CGT liability on your existing property 9 months after you move out whichever option you go with. 

Sistergold

Living together is a whole kettle of fish. Why not leave all the financials the way they are? Move in together, she continues paying mortgage and in two years time when everyone is ready to sell you all sell then buy together? Good to test run the relationship first before involving assets. Also this means there are no tax implications so to speak. 

WYSPECIAL

p00hsticks said:

WYSPECIAL said:

p00hsticks said:

WYSPECIAL said:

SavingPennies_2 said:

What do she think? Cos if I was her I'd be thinking I'd be going from owning my own property to owing half/part of a property, whereas you would be going up to having one and a half properties, that puts you in a stronger position. If you intend to buy together in a few years anyway, why not move in pay towards food/ bills but nothing in terms of mortgage. Then you both still own a property, then in a few years you can both sell and jointly own somewhere together.

I see your point but our thinking is she currently owns half a property (approximately) and the other half is owned by the mortgage lender.

No, she owns a whole property and owes a mortgage lender a sum of money.

If you wish to replicate this arrangement , then lend her enough money to pay off the mortage and get a charge put on the property so that you get the money repaid when the property is sold.

The you still each own a property, the mortgage is paid off, there are no SDLT or CGT implications for you and your loan is protected.

That’s the idea. I’ll either buy half and we’ll be joint owners or I’ll lend her the money so she is mortgage free. 

My query is around what the cost implications in term should of stamp duty, cut etc are with each. 

We’re both happy with either solution but want it to be as cost  efficient as possible.

If you lend the money then you don't own the property so no SDLT to pay.

If you buy half the house then you'll be liable to pay SDLT (at the enhanced rate because you already own a property) on the purchase - there wouldn't be any CGT liability on the sale if you live in it for the whole period that you own it.  you will be potentially be building up a CGT liability on your existing property 9 months after you move out whichever option you go with. 

Would SDLT be based upon the full value of the house or the half that I would be buying?

sounds like it would be far cheaper to just lend her the money and get a charge drawn up.

hazyjo

This really could get messy if you buy in and split up. I agree with those saying (especially what Sistergold said) just move in for now. See how it goes until you're ready to buy together. Honestly, it's just easier.

WYSPECIAL

Thanks for all the help.

One last question. If I lend her the money to clear her mortgage for the interim period until her house is sold and we buy together, which we estimate to be another 2-3 years away, is it legal for me to keep my address as my primary residence to minimise any CGT liability if and when it is sold?

No plans have been made regarding my house and we won't need the equity from it to buy together so it may be some years before it is sold and a capital gain liability arises. Obviously the potentially smaller that liability is the better.

Slithery

WYSPECIAL said:

...is it legal for me to keep my address as my primary residence to minimise any CGT liability if and when it is sold?

No.
Lying to HMRC about where your main residence to evade tax is fraud.
Although depending on how long you've owned the property the amount af CGT payable may be zero anyway as you have a yearly personal allowance and the last 9 months are counted as you living there anyway, even if you're not.

SavingPennies_2

Who benefits from this arrangement? If you split in a year, you still have your own home to go back to, but she'd have to sell her home to repay you the money. If no money is involved (at this stage) and you split, then no (financial) harm done, you both still have a home, she still has a mortgage to repay but what's the issue with that? If I was her I wouldn't agree to this, unless there's some info missing here. Edited to add. I see what you're saying about her increasing pension contributions etc, but my point is, if you split as things are the bank won't make her sell her home but you could in order to get your money back. I know this is worst case scenario and hopefully it wouldn't come to that but it needs to be considered esp as children are involved. 

dimbo61

Have you got the money to match her mortgage debt ?
Why not consider a Yorkshire Building Society Offset mortgage !
With " friends and family " she can take out an mortgage and you can open an offset account to put your savings offsetting her mortgage.
Hence No or very little interest is paid.
Your partner is paying down her mortgage much quicker each month therefore building up equity and your getting No return what's so ever on your savings !
How much are you earning right now ???
Each month as the mortgage payment goes out you take the same amount out of the Offset account and invest it in other savings/pensions/LISA,s /Pemium bonds etc

Just an idea 

saajan_12

WYSPECIAL said:

p00hsticks said:

WYSPECIAL said:

p00hsticks said:

WYSPECIAL said:

SavingPennies_2 said:

What do she think? Cos if I was her I'd be thinking I'd be going from owning my own property to owing half/part of a property, whereas you would be going up to having one and a half properties, that puts you in a stronger position. If you intend to buy together in a few years anyway, why not move in pay towards food/ bills but nothing in terms of mortgage. Then you both still own a property, then in a few years you can both sell and jointly own somewhere together.

I see your point but our thinking is she currently owns half a property (approximately) and the other half is owned by the mortgage lender.

No, she owns a whole property and owes a mortgage lender a sum of money.

If you wish to replicate this arrangement , then lend her enough money to pay off the mortage and get a charge put on the property so that you get the money repaid when the property is sold.

The you still each own a property, the mortgage is paid off, there are no SDLT or CGT implications for you and your loan is protected.

That’s the idea. I’ll either buy half and we’ll be joint owners or I’ll lend her the money so she is mortgage free. 

My query is around what the cost implications in term should of stamp duty, cut etc are with each. 

We’re both happy with either solution but want it to be as cost  efficient as possible.

If you lend the money then you don't own the property so no SDLT to pay.

If you buy half the house then you'll be liable to pay SDLT (at the enhanced rate because you already own a property) on the purchase - there wouldn't be any CGT liability on the sale if you live in it for the whole period that you own it.  you will be potentially be building up a CGT liability on your existing property 9 months after you move out whichever option you go with. 

Would SDLT be based upon the full value of the house or the half that I would be buying?

sounds like it would be far cheaper to just lend her the money and get a charge drawn up.

If you buy half, then SDLT would be on the money you pay (whether to her or the lender), ie for the 50%. 

If you lend and place a charge, then think about when you'd both expect the money to be repaid.
- monthly repayments?
- lump sum when she feels like selling?
- what if you break up or need the money - can you force a sale?
- interest? income tax? 

While she can pay more into a pension, your money would have 0% return.. 

WYSPECIAL

Slithery said:

WYSPECIAL said:

...is it legal for me to keep my address as my primary residence to minimise any CGT liability if and when it is sold?

No.
Lying to HMRC about where your main residence to evade tax is fraud.
Although depending on how long you've owned the property the amount af CGT payable may be zero anyway as you have a yearly personal allowance and the last 9 months are counted as you living there anyway, even if you're not.

I was thinking more along the lines of legally being able to choose which address I nominate as my main residence rather than any fraud.

Is any allowance made for work I have done that will have increased its value beyond the original sale price? I’ve owned it for over 20 years and extended it in that time.