Gift deposit for buy-to-let property

Islington_blue9

Hello, 

My girlfriend and I currently live together in a house owned outright by her. She has around £150,000 in savings and I have around £40,000. 

I want to buy a house to let, using the money from both of our savings - buying the house outright. I would like the house to be solely in my name as I have never owned property and, therefore, won't have to pay as much stamp duty compared to the house being in both our names. 

The rent would then be paid directly to me as I am on a lower income and would pay less tax on it. 

Is it possible for my partner to gift me £150,000 for me to buy this house? 

Thank you for your help

Albermarle

Your partner can give as much as she likes, to who she likes, so no problem for you or her from a legal/tax point of view.
However she may want to protect herself from losing all the money, in case you split up and/or the whole exercise proves to be a disaster.

Perhaps more of a question is why do you want to be a first time landlord? Profits are rather thin nowadays and there are a lot of rules and regulations to work around. Not discounting the possibility of dodgy tenants either.
If it is an investment for the future, then much easier just to invest it stocks and shares/pensions.

Brie

Should you decide to go down this route I believe both of you may need your own solicitor.  Yes she can gift you as much as she likes but a solicitor may very well advise against it.  A better plan, for her, might be to buy the house with you on a pro rata basis so that she owns a larger portion.  

But as already stated, this may not be the best investment at this time.

user1977

Brie said:

Should you decide to go down this route I believe both of you may need your own solicitor.

I've not heard of gifters being obliged to get legal advice? But there might be a plausibility problem about her not retaining some sort of beneficial interest in the money - why would she want to wave goodbye to her £150k? This isn't similar to, say, granny giving an early inheritance to the OP.

saajan_12

Islington_blue9 said:

Hello, 

My girlfriend and I currently live together in a house owned outright by her. She has around £150,000 in savings and I have around £40,000. 

I want to buy a house to let, using the money from both of our savings - buying the house outright. I would like the house to be solely in my name as I have never owned property and, therefore, won't have to pay as much stamp duty compared to the house being in both our names. 

The rent would then be paid directly to me as I am on a lower income and would pay less tax on it. 

Is it possible for my partner to gift me £150,000 for me to buy this house? 

Thank you for your help

If gf is really happy to GIVE away 150k with zero in return, lose the ~£500 a month she should be getting in interest, then yes you can do. If you break up, then you have a house and she has 0 life savings. 

However if gf isn't happy with the above (IMO crazy) gift, then there might be some options.. She could loan you the money, with a charge registered on the property. The loan could be interest free or with x% interest. I'd suggest this is a fixed % and not based on the rental income or property value, so that there's no question of beneficial interest. 
She'd pay tax on the interest as she does now. 

Given there's no mortgage and she woudln't be living there, I don't think you really create a benefcial ownership or joint borrower issues in either case. Your lawyer would ask her to sign that she clearly knows what she's doing. 

Keep_pedalling

As you would not need a mortgage she could loan you the money and protect har loan with a charge against property so she could get it back should you split up. She would be extremely foolish to do it any other way.

Grumpy_chap

Islington_blue9 said:

Hello, 

My girlfriend and I currently live together in a house owned outright by her. She has around £150,000 in savings and I have around £40,000. 

I want to buy a house to let, using the money from both of our savings - buying the house outright. I would like the house to be solely in my name as I have never owned property and, therefore, won't have to pay as much stamp duty compared to the house being in both our names. 

The rent would then be paid directly to me as I am on a lower income and would pay less tax on it. 

Is it possible for my partner to gift me £150,000 for me to buy this house? 

Thank you for your help

Yes, assuming that she wants you to buy a house as much as you want to buy a house.

Are you aware of the obligations of being a LL?