Can four people buy a house together ?

carboot_karaoke

Good Afternoon,  l am after some advice please,

My partner and I and another couple are considering buying a house to renovate and sell.

The house would be purchased  50/50 cash. 

I wanted to know if,  you can have 4 legal owners of a property and if so is this likely  to increase conveyancing costs? Also,  when its sold can all four of us use are CGT allowance against potential profits?

We would have a written agreement in place covering our respective responsibilities etc. Is there anything else that we should be aware of?

Many thanks 😁

MultiFuelBurner

Are you currently friends? If so you might not after embarking on this.

There are some mortgage companies that allow up to 4 people but best you speak to a mortgage broker and financial advisor as well as a solicitor.

propertyrental

MultiFuelBurner said:

Are you currently friends? If so you might not after embarking on this.

There are some mortgage companies that allow up to 4 people but best you speak to a mortgage broker and financial advisor as well as a solicitor.

OP spoke of cash so I suspect no mortgage broker is relevant.

Yes, Under section 34 of the Trustee Act 1925 the maximum number of legal owners (i.e. the registered proprietors) is 4. though a Deed of Trust needed to confirm shares and also what would happen in various future scenarios. Own as 'Tenants in common and write wills.

https://hmlandregistry.blog.gov.uk/2016/08/16/legal-estates-beneficial-interests-whats-difference/

Yes there might be a slightly higher legal fee for drawing up the Deed of Trust (but well worth doing thi!).

Yes, on sale each party could use their CGT allowance to offset their share of any CGT on their share of the gain.

carboot_karaoke

propertyrental said:

MultiFuelBurner said:

Are you currently friends? If so you might not after embarking on this.

There are some mortgage companies that allow up to 4 people but best you speak to a mortgage broker and financial advisor as well as a solicitor.

OP spoke of cash so I suspect no mortgage broker is relevant.

Yes, Under section 34 of the Trustee Act 1925 the maximum number of legal owners (i.e. the registered proprietors) is 4. though a Deed of Trust needed to confirm shares and also what would happen in various future scenarios. Own as 'Tenants in common and write wills.

https://hmlandregistry.blog.gov.uk/2016/08/16/legal-estates-beneficial-interests-whats-difference/

Yes there might be a slightly higher legal fee for drawing up the Deed of Trust (but well worth doing thi!).

Yes, on sale each party could use their CGT allowance to offset their share of any CGT on their share of the gain.

Thank you for your response 😊 that is really helpful. It's unlikely to be a regular occurrence, but if we did go on to buy additional properties would you need a Deed of trust for each one?

propertyrental

carboot_karaoke said:

propertyrental said:

MultiFuelBurner said:

Are you currently friends? If so you might not after embarking on this.

There are some mortgage companies that allow up to 4 people but best you speak to a mortgage broker and financial advisor as well as a solicitor.

OP spoke of cash so I suspect no mortgage broker is relevant.

Yes, Under section 34 of the Trustee Act 1925 the maximum number of legal owners (i.e. the registered proprietors) is 4. though a Deed of Trust needed to confirm shares and also what would happen in various future scenarios. Own as 'Tenants in common and write wills.

https://hmlandregistry.blog.gov.uk/2016/08/16/legal-estates-beneficial-interests-whats-difference/

Yes there might be a slightly higher legal fee for drawing up the Deed of Trust (but well worth doing thi!).

Yes, on sale each party could use their CGT allowance to offset their share of any CGT on their share of the gain.

Thank you for your response 😊 that is really helpful. It's unlikely to be a regular occurrence, but if we did go on to buy additional properties would you need a Deed of trust for each one?

Yes........................

RAS

I don't think there will be a CGT allowance after April 2024?

[Deleted User]

Bear in mind that if the property is purchased with the intention of renovation and then selling the sale proceeds would be trading income.

The profit would not be a capital gain and income tax would be chargeable.

_Penny_Dreadful

carboot_karaoke said:

Good Afternoon,  l am after some advice please,

My partner and I and another couple are considering buying a house to renovate and sell.

The house would be purchased  50/50 cash. 

I wanted to know if,  you can have 4 legal owners of a property and if so is this likely  to increase conveyancing costs? Also,  when its sold can all four of us use are CGT allowance against potential profits?

We would have a written agreement in place covering our respective responsibilities etc. Is there anything else that we should be aware of?

Many thanks 😁

When you are in the business of flipping properties the profits are subject to income tax, not capital gains tax.

ReadingTim

carboot_karaoke said:

Thank you for your response 😊 that is really helpful. It's unlikely to be a regular occurrence, but if we did go on to buy additional properties would you need a Deed of trust for each one?

If you want to do that, it might be better to set up your own company with each of you owning 25% of the share capital, and then the company buying the property(ies)