Remortgaging predicament

justaquery1

Sorry if this is obvious but how do I go about remortgaging a house I don’t live in but my family member does and gives me the money for the bills, it’s no profit just under my name for credit reasons. It’s under a residential mortgage at the moment can it still be one or does it have to change? 

Hoenir

Does the family member give you cash to cover the mortgage? 

justaquery1

Hoenir said:

Does the family member give you cash to cover the mortgage? 

Yes they give me the amount and no more

silvercar

Sounds like a regulated buy-to-let. Regulated because it is let to a family member rather than a stranger, BTL because you get rent money that you use to pay the mortgage.

justaquery1

So would I still need to pay tax on this?

FlorayG

justaquery1 said:

So would I still need to pay tax on this?

Sadly, yes. These days you pay 20% on the income, not the profit, so you pay tax on the money you receive in rent before you pay the mortgage out of it

Hoenir

justaquery1 said:

So would I still need to pay tax on this?

Yes. Would deemed to be rent. 

Be aware HMRC penalties are severe for evasion. If they were to catch up with you. The longer this continues the worse the problem will become. 

FlorayG

silvercar said:

Sounds like a regulated buy-to-let. Regulated because it is let to a family member rather than a stranger, BTL because you get rent money that you use to pay the mortgage.

not necessarily, because the OP doesn't say what family member it is.
"In a regulated buy-to-let property, tenants can only be immediate family members of the borrower. This means close relatives like children, parents, siblings, and grandparents"

silvercar

FlorayG said:

justaquery1 said:

So would I still need to pay tax on this?

Sadly, yes. These days you pay 20% on the income, not the profit, so you pay tax on the money you receive in rent before you pay the mortgage out of it

The interest on the mortgage is still an expense, only difference is that now it is restricted to basic rate.