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So Tom collects rent, yet Paul pays the tax?
If Tom's income was significantly high Paul could've underpaid tax and depending on his intent, one or the other may have committed tax fraud? Of course if you're both quite poor it's not an issue, but if you had different income levels and depending on when one of you was paying...
Tom had a significant low income, whereas Paul was employed by a respectable company. Paul's salary was good.0 -
For a court, what a) written proof do you have that the other guy gifted you the money? b) why did you let the other person collect profit for so long? Do you have written evidence of your objections from early on?
there is no written proof whether it was given as a gift nor a loan. However when I consulted a lawyer, the lawyer said unless it was given as a loan with written document then it count as a gift. I do not know how true this is.0 -
Tom had a significant low income, whereas Paul was employed by a respectable company. Paul's salary was good.
That sounds much better. Also fact that you had greater income makes it sound less like an attempt to defraud a mortgage company (and in the old days, they didn't care about income so much so that's helpful too)
I think genera presumption in courts is that it's a gift unless there's a clear loan agreement. What works in your favour is that it's a long time ago and you have been collecting income yourself for a while now from the house, and that you were paying tax more recently.
I'm no lawyer but I think the burden is on the other guy to prove how they have an interest in the house.
Also, has the other person collected enough money to more than pay over the initial deposit gift over? That might also work in your favour - the idea that even if the gift was a loan, your relative has been paid that back and bit more might make a court think he's been quite unreasonable.
I'm no lawyer.0 -
That sounds much better. Also fact that you had greater income makes it sound less like an attempt to defraud a mortgage company (and in the old days, they didn't care about income so much so that's helpful too)
I think genera presumption in courts is that it's a gift unless there's a clear loan agreement. What works in your favour is that it's a long time ago and you have been collecting income yourself for a while now from the house, and that you were paying tax more recently.
I'm no lawyer but I think the burden is on the other guy to prove how they have an interest in the house.
Also, has the other person collected enough money to more than pay over the initial deposit gift over? That might also work in your favour.
I'm no lawyer.
Yes indeed those days banks were really not fussy, they would give it to anyone with a solid job.
Tom made well over 70k over the years. This is including I had to pay £400 per month (5 years) for living at my mums house because that was fair share of the house I had to input and what my job was giving me I managed by. Tom had a good life with my mum.0 -
However when I consulted a lawyer, the lawyer said unless it was given as a loan with written document then it count as a gift. I do not know how true this is.
A court does not arbitrate on hearsay. With no documentary evidence to support a claim. A judge wouldn't give you the time of day. A complete waste of the courts time.0 -
Thrugelmir wrote: »A court does not arbitrate on hearsay. With no documentary evidence to support a claim. A judge wouldn't give you the time of day. A complete waste of the courts time.
So all in all Paul has a leg to stand on?0 -
Thrugelmir wrote: »A court does not arbitrate on hearsay. With no documentary evidence to support a claim. A judge wouldn't give you the time of day. A complete waste of the courts time.
I'm not so sure its that clear cut. just playing devils advocate, evidence would be
1.Large some of money transferred at time of buying house.
2.Several years of rental monies going to the person that sent the money
If 1 was simply a gift then why 2?
But even the opening poster says it wasn't, it was a loan, So what was agreed at the time whether documented or not then each person will have their own version of how it was to be repaid.0 -
A court can only go on the evidence they are provided. If something is written down then it is easy for the court to tell what was intended. If there isn't anything written down, then they will have to make a judgement call as to what is more likely and reasonable given the stories both sides are giving. If both sides tell the court that there was an agreement to do "x", then the court will take that agreement into account. If one side says that agreement never happened, then the court will probably assume that it didn't.
Let's assume deposit was £20k and house was £100k. The numbers don't really matter but I think it makes the examples easier to understand.
Paul's version:
1. Tom gave Paul a gift of £20k.
2. Paul buys a house for £100k. Tom does not buy a house.
3. Paul uses the rental income to pay the mortgage
4. Paul gives Tom a regular gift of the rental profit income.
Tom's version:
1. Tom and Paul buy a house together, using £20k cash from Tom and an £80k mortgage from Paul.
2. For some reason Paul doesn't get any written record of his £20k investment.
3. Tom and Paul manage the house together, using the rental income to pay the mortgage.
4. Paul keeps the rental property.
Neither version makes sense to me given what else you've told us.
Paul's version makes it look like it is really Tom's property, because Tom is receiving an income from it. For some reason Tom doesn't want it in his name. If Tom can give a sensible, legal reason then I can see Tom being awarded an interest in the property. I wouldn't recommend he tell the court that he was committing fraud or tax evasion, which are the reasons that spring into my mind!
Tom's version makes it look like Tom was negligent when the house was purchased (because he didn't record his interest in the property) and since then he has been abusing Paul by taking all the profit from a joint asset.Note: Unless otherwise stated, my property related posts refer to England & Wales. Please make sure you state if you are discussing Scotland or elsewhere as laws differ.0 -
Thank you for all your replies.0
This discussion has been closed.
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