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Helping Family, Disaster or Triumph?

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  • BM5118
    BM5118 Posts: 39 Forumite
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    Red-Squirrel wrote: »
    If your Aunt has a job and £100K in the bank she should go to a good mortgage broker and get her own house. It will almost certainly be possible.

    She really shouldn't be making her young niece/nephew responsible for her housing. Its not fair.


    I agree she should probably go to a mortgage broker, but as she isn't and wants to rent I feel like I could benefit from her. She certainly isn't putting a burden on me to get a house, although I must say this thread has made me realise if we do proceed on this route to keep it all in my name and as simple as possible.


    I'm seeing my parents and her on monday, Ill put it to her that she could probably just go and get her own place via a mortgage broker. Alternatively I would be happy look for a place together, putting everything in my name. She would simply contribute an amount towards the bills / mortgage. I ll talk to her about what she can realistically afford, and see if anything matches.


    I have a fairly large disposable income so if there is a shortfall I would still be completely fine with that. I think I need to approach this from a "I am getting a house, and she can stay in it" view point.



    If she isn't keen then I'll stop there and maybe look for my own place regardless.
    Thanks for your help everyone
  • BM5118
    BM5118 Posts: 39 Forumite
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    fairy_lights wrote: »
    I don't see how this is a win-win situation in any way at all.
    You say you want your own home to go to on your days off - but it wouldn't be your home would it, it would be your aunts home that you just stay in occasionally.
    Have you ever lived with her before? if you disagree about what to watch on tv or what colour to paint the living room it could strain your financial and family relationships.
    And if she wants the option to buy the property off you in the future, would this be at full market value or would she be expecting a generous discount?
    This could get incredibly messy.


    I agree it could get messy. I definitely earn a significant amount more than her and everyone else in the family. Thats why i think if we are clear from the beginning on all terms it could hope to avoid complications further down the line. I would insist on something like 3 valuations of the property and picking the average/middle one. Something like that if I were to sell it to her. If we agree this all beforehand then hopefully it should avoid drama. Ultimately we are a very close family, there is good will on all sides. So hopefully if we are open and honest from the start it shouldn't sour in the future!
  • need_an_answer
    need_an_answer Posts: 2,812 Forumite
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    BM5118 wrote: »




    I have a fairly large disposable income so if there is a shortfall I would still be completely fine with that. I think I need to approach this from a "I am getting a house, and she can stay in it" view point.



    so you don't intend to put this on the firm setting of LL and Tenant?
    in S 38 T 2 F 50
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  • BM5118
    BM5118 Posts: 39 Forumite
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    need_an_answer wrote: »
    so you don't intend to put this on the firm setting of LL and Tenant?


    Again probably a grey area, In my mind I think more of a lodger scenario.


    I checked the money advice service website and I can have a lodger paying 7500 per year without having to declare it or pay any tax. I will suggest she gifts me 625 per month. I will have all bills in my name, I think i will suggest she gives me 1/2 the amount of the bills each month including council tax.


    Maybe she can buy me dinner once or month or something too to balance it out but in all honesty she is a close family member, our intentions are good, neither party is out to get anything passed the other. I will be slightly out of pocket each month depending on the property I go for, however I just need to make sure this is an amount I am comfortable spending each month.
    I doubt we will even have a contract drawn up, im aware she will automatically get rights, but the chances of this falling apart are super low.



    I don't think this approach would upset a mortgage lender, HMRC or my employer.
    I'll let you know how the conversation goes. She may not like the idea in which case its back to the drawing board to work out a plan!
  • Slithery
    Slithery Posts: 6,046 Forumite
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    edited 11 January 2019 at 7:02PM
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    BM5118 wrote: »
    In my mind I think more of a lodger scenario.
    It doesn't matter what you think, there are legal definitions for this sort of thing.

    What part of 'it won't be your main residence therefore she cannot legally be a lodger' do you not understand?
  • Hasbeen
    Hasbeen Posts: 4,404 Forumite
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    Hope all landlords are looking at this. Buy house put someone in as lodger get £7500 per year tax free? Really? skim read most of posts but will this work?
    The world is not ruined by the wickedness of the wicked, but by the weakness of the good. Napoleon
  • BM5118
    BM5118 Posts: 39 Forumite
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    Slithery wrote: »
    It doesn't matter what you think, there are legal definitions for this sort of thing.

    What part of 'it won't be your main residence therefore she cannot legally be a lodger' do you not understand?


    Just reading up on main residence criteria with regards to CGT and I believe you are incorrect in your advice.


    My main residence has more criteria than just which property I spend more time in. It also seems



    This is taken from: https://www.property-tax-portal.co.uk/taxarticle84.shtml
    Here are questions HMRC ask when relating to CGT for main residence status.



    (a) At which residence is the individual registered with a doctor or dentist? New home

    (b) Where are the majority of his or her possessions kept?
    New home, the only thing I keep in my work house is work uniforms, a toothbrush and a laptop. It is fully furnished and not single thing in it is mine.

    (c) Where is the individual registered to vote?
    New home
    (d) Consider the membership of clubs and other social activities.
    New home, gym membership would be there.

    (e) Which address is used as normal postal address?
    New home, I have no post/record of living at the work address.

    (f) Which property does he or she regard as the main residence and how is time split between the residences?
    I see my work accommodation as a hotel, although I spent marginally more time here than in my new home.

    (g) Where do spouse and dependants live?
    Currently not applicable, however if I had a wife she certainly wouldn't be allowed on my work property.

    (h) From which residence do children attend school?
    Would be new home. Again wouldnt be allowed children at work.

    (i) At which residence does the individual spend time with the family?
    Family wouldn't be allowed to visit, so new home by default




    Out of interest, is the owner allowed to take out a BTL mortgage with the intention of living in it themselves?
    Thanks for you help everyone

  • The_Earl_of_Streatham
    The_Earl_of_Streatham Posts: 161 Forumite
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    BM5118 wrote: »
    Out of interest, is the owner allowed to take out a BTL mortgage with the intention of living in it themselves?
    Thanks for you help everyone


    You seem quite capable of doing detailed research to find stuff that refutes what people are taking the trouble to tell you here. This is not the place you need to be winning the argument.

    If you want to find out about the limits placed on BTL mortgages, there's no need to wait until you feel the need to refute what people here will tell you.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
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    Oh well OP, now that you've quoted an 8 year old article off the internet and that's not even by HMRC, we stand corrected. If only Hezi Yechiel had you on his side telling HMRC what you feel makes a main residence.

    Instead of the BTL mortgage question you should be asking if a lender will give you a residential mortgage for a property that won't be where you reside and the deposit is coming from someone not on the mortgage but who will be residing in the property.

    Has you aunt even suggested this "solution" or is this all you?
  • BM5118
    BM5118 Posts: 39 Forumite
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    Pixie5740 wrote: »
    Oh well OP, now that you've quoted an 8 year old article off the internet and that's not even by HMRC, we stand corrected. If only Hezi Yechiel had you on his side telling HMRC what you feel makes a main residence.

    Instead of the BTL mortgage question you should be asking if a lender will give you a residential mortgage for a property that won't be where you reside and the deposit is coming from someone not on the mortgage but who will be residing in the property.

    Has you aunt even suggested this "solution" or is this all you?

    I'll let you know what the outcome is in a few days, some of you seem rather flustered over a few words so I'll keep you updated :rotfl:

    I just spent a whopping 5 minutes reading the outline of the Hezi Yechiel case, based on the criteria outlined for "sufficient quality of occupation" I think I would meet all of those criteria and which just adds another string to my bow of ideas.

    Perhaps it is leaning somewhat towards a grey area, but I will pursue this idea as it seems fairly sensible to me. Presumably so long as I pay the mortgage on time every month my mortgage lender won't care about the quality of my occupation. Even if they did I'd be happy to argue my point and worst case scenario my aunt wouldn't be able to give me 7500 towards the property. Which isn't part of the plan but wouldn't be an issue.

    Depending on the deposit requirement I'd be confident my aunt would lend it, although I'd happy save for a couple more months if necessary to avoid a loan. If she were to gift me 15k for example that would cover 2 years of her living there based on this very informal arrangement between family.

    Thanks for you help, sorry if its caused some flustering!
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