Tenants in common - unequal shares fairness

Woby_Tide

Partner and I are broadly in agreement of how we want to proceed but having read other threads and discussed with others just want to check that we aren’t missing anything as some have suggested alternative plans.

Situation, uneven deposit, uneven earnings. 

Say for example the house will be £600k, deposits £400k (partner A), £100k (partner B ), £100k mortgage.

 Partner B earns 3x Partner A so will be responsible for more of ongoing costs but no intention of splitting costs in specific shares, joint finances so the bills will be paid and anything left will be joint savings or paying off mortgage.

original idea was tenants in common with unequal shares, split 80/20 for first £500k of any future sale(this is worst case scenario, aim is it to be till death then the wills would cater for how it goes to other partner then onto children), anything above £500k to be split equally

Reading other threads people say that because the 80/20 should be for all the house regardless due to deposits, but as we see it, both can’t own a property big enough without Partner A deposit to purchase and Partner B wage to service it going forward, hence we are happy to preserve what we start with and then split the remainder as a joint asset as we are both contributing and want this to work. The deposit contains a partial inheritance so that is one driver of ensuring it stays with partner A if things went wrong.

I’ve seen mentions of floating deeds of trust to reflect different contributions going forward but this seems more convoluted and complicated. Is our proposal unfair to either party or something we haven’t considered? t thanks in advance for any thoughts/ideas

quotememiserable

How long of a mortgage are we talking about? Sounds like you're on a fairly equal footing. Why not just commit to each other and call it 50/50. Then go to dinner.

Soot2006

We did your initial thinking. Deed of trust to protect unequal deposit amounts put in,then 50/50 on everything else. We didn't "account" the 50/50 expenditure on everything, just paid for stuff and kept living. When we jointly had enough to buy a big thing/pay a renovation, that's what we did. Both my partner and I were in agreement that this was the risk we wanted to take and it was the best way to make the house feel like OUR house while protecting that early investment.

10 years later we sold that house and bought another, this time as joint tenants. We still joke about "well as least I'd get my deposit back if we split up" and I do believe we're the type of people who would split amicably and do right by each other. However, only you can know what you're comfortable with. Most of the things we own or do in life we wouldn't have been able to buy or do alone, so at 21 years relationship we figure we're in for a penny in for a pound by now.

Emmia

You refer to 'partner' so I presume you're unmarried/not civil partnered. 

Whilst this isn't the topic of the thread, do you have arrangements in place that could cover IHT liabilities if one of you died without you being legally joined (where the property would go to the survivor), or are you both ok with the property potentially being sold to cover the bill in that situation?

Mutton_Geoff

Emmia said:

You refer to 'partner' so I presume you're unmarried/not civil partnered. 

Whilst this isn't the topic of the thread, do you have arrangements in place that could cover IHT liabilities if one of you died without you being legally joined (where the property would go to the survivor), or are you both ok with the property potentially being sold to cover the bill in that situation?

Good tip, level term life insurance good for this. MSE lists Cavendish as a place to look. Certainly something I've done in the past.

Woby_Tide

quotememiserable said:

How long of a mortgage are we talking about? Sounds like you're on a fairly equal footing. Why not just commit to each other and call it 50/50. Then go to dinner.

Technically it's 18 years but aiming to pay it off as quick as possible through various means. We are committed hence taking this step but as divorced 40 somethings with uneven number of kids it's all slightly different so we're just making sure we've everything covered

Woby_Tide

Emmia said:

You refer to 'partner' so I presume you're unmarried/not civil partnered. 

Whilst this isn't the topic of the thread, do you have arrangements in place that could cover IHT liabilities if one of you died without you being legally joined (where the property would go to the survivor), or are you both ok with the property potentially being sold to cover the bill in that situation?

Thanks, yes not connected bar this for now but yes also sorting out wills as part of all this

Emmia

Woby_Tide said:

Emmia said:

You refer to 'partner' so I presume you're unmarried/not civil partnered. 

Whilst this isn't the topic of the thread, do you have arrangements in place that could cover IHT liabilities if one of you died without you being legally joined (where the property would go to the survivor), or are you both ok with the property potentially being sold to cover the bill in that situation?

Thanks, yes not connected bar this for now but yes also sorting out wills as part of all this

Wills are good, but don't prevent IHT needing to be paid on the first death.