Girlfriend owns flat. Boyfriend moves in. If he pays towards mortgage, is that in effect taxable?

MikeJXE

Lol does she know the statistics on the chance of a long term relationship with her partner ? Has she not read love and marriage in this century is a big risk ? She has worked for however long to buy what she has only to share that with another. Is he her first love and will be her best love only  until she meets her next love. Previous post said help with running cost and leave the mortgage out of it is what is probably the best. 

Ath_Wat

silvercar said:

user1977 said:

No, it isn't rent.

I agree with you.

It is interesting. Rent out your spare room and you have a tax liability mitigated by the rent a room scheme. Move in a partner and the “rent” is a contribution to costs and tax free.

Because a contribution to costs is not income - you don't receive it.  They actually pay the gas bill, or actually go out and buy food.

If they pay you a set amount every month or week instead of doing this, it's likely to be perceived as rent.

Bendy_House

Hi CB.

I think it's worth working through the possible outcomes for a number of different scenarios. And any involving 'legalities' - drawing up contracts to protect your daughter, for example - might suit her (I guess it will), but could surely (a) leave a bad taste in t'mouth, and (b) in the event of a break-up, leave the BF feeling wrong done by (and he would have been).

It's a bit 'prenumpt', isn't it - what a way to begin a marriage! In this case, 'Thanks for the mortgage payments - now shove off'.

IF they break up - and I hope they won't - then there will likely be enough trauma to begin with, without them also having to trawl through who might owe what, or one feeling as tho' they wuz robbed as well as having a mangled heart.

What I'd strongly suggest is that she keeps paying the mortgage in full - I presume she can afford to - and they split every other cost-of-living bill in half. Everything - energy, food, insurance, repairs, etc. He puts all his new-found savings into his own account, and can make it separate and call it "Our future" if he likes. (It'll become "My future" if the worst happens - at least he'll have some more money.)

They are both immediately better off, she has saved half her costofliving bills, he is saving towards their future (or his if pear-shape), he can pay a bit more if he likes - but he'll have to acknowledge it's a gift and therefore 'gone', and - should the worst happen - they are both still ok financially (back to where they were, tho' both with extra savings), and can say "It was good, shame it didn't work out..." and walk away.

When they do get married, then it's all moot.

Colin_Buckleberry

Thanks for the comments and advice — I appreciate it. 

SadieO

Bendy_House said:

What I'd strongly suggest is that she keeps paying the mortgage in full - I presume she can afford to - and they split every other cost-of-living bill in half. Everything - energy, food, insurance, repairs, etc.

She should research "beneficial interest" though - the partner may be able to claim this if he says he has enhanced the house and so contributed to increasing its value or even just paying bills might count. 

74jax

Colin_Buckleberry said:

Thanks for the responses. So far my daughter has been told:

— A lawyer can draw up a contract to ensure Boy A has no claim on the property, even if he pays X towards the mortgage / as a de facto rent payment. 

— She’s been advised to draw up this contract as an AST, even though they’ll be sharing a bedroom, but to cap the rent at £625pm (£7,500pa). I presume this is to fulfil the conditions of the tax-exempt ‘Rent A Room’ scheme… even though she’s not renting a room. 

Does any of this change the above advice? And, in response to Keep_pedalling, is there a legal distinction between paying towards the mortgage and having Boy A simply transfer a sum of money into Girl A’s bank account each month?

Are you saying a lawyer told her this? If so, please advise her to look at another lawyer as you can't do this in her situation. And any lawyer should know that, and not advise this.... 

If it's just a friend who told her, that's fine, but you say she's been talking to a lawyer so best to double check. 

Mutton_Geoff

Just curious what the boyfriend is bringing to the party?

zagubov

This sounds like one step away from claiming you could charge your spouse or kids rent for living with you.
It's essentially a familial relationship and the money is a contribution to things like utility bills and food. 

Mojisola

From the BF's point of view, he will have absolutely no rights to remain in the property - he could come home one day to find all his stuff packed up and the locks changed.  Anyone going into an arrangement like this needs to have back-up savings to cover emergency accommodation and the funds to start renting their own place.

Bendy_House

Mojisola said:

From the BF's point of view, he will have absolutely no rights to remain in the property - he could come home one day to find all his stuff packed up and the locks changed.  Anyone going into an arrangement like this needs to have back-up savings to cover emergency accommodation and the funds to start renting their own place.

As he would - he's saving a monthly rent, a not-insignificant sum. This he saves (for himself, or for them both) and if the relationship doesn't work out, he should be little worse off than he was before; ie back to square one, BUT with some accumulated savings.

He 'brings to the table' half the living costs, so girlfriend saves a significant sum too.

To consider contracts and agreements just seems messy to me, and completely unnecessary. And what a potential extra unpleasantness should it not work out.