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Tenants in common & declaration of trust

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pootleflump
pootleflump Posts: 87 Forumite
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in House buying, renting & selling
My husband and I are buying a house but we will have to let it for a few years before we can live in it.

We are buying as TIC, with me owning 99%, him 1%. This is so that I get the rental income, as I'm a basic rate taxpayer and my husband is higher.

If anything were to happen that forced us to sell, we would want 50/50 of everything, including initial deposits.

In this case, is a declaration of trust required? Or would that only be necessary if we wanted unequal shares upon sale?
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  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    pootleflump wrote: »
    In this case, is a declaration of trust required? Or would that only be necessary if we wanted unequal shares upon sale?

    As you are married then a financial settlement would need to be agreed that covers all your assets.
  • pootleflump
    pootleflump Posts: 87 Forumite
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    Thrugelmir wrote: »
    As you are married then a financial settlement would need to be agreed that covers all your assets.


    So are you saying a declaration of trust is required?
  • 00ec25
    00ec25 Posts: 9,123 Forumite
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    you are married

    you must own as TIC, not JT, but even so the unequal shares will not be accepted by HMRC for the purposes of income tax unless you submit a Form 17 supported by a DoT

    as you will be TIC, you can then alter the split when ready to sell. CGT is based on beneficial ownership, not legal ownership so you will need a new/final DoT to confirm the split on sale

    a divorce will override anything you have in place as that will start from 50/50, the rest is acrimony and fighting
  • Cakeguts
    Cakeguts Posts: 7,627 Forumite
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    How would your legal ownership affect getting a buy to let mortgage if you need a mortgage to buy?
  • pootleflump
    pootleflump Posts: 87 Forumite
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    00ec25 wrote: »
    you are married

    you must own as TIC, not JT, but even so the unequal shares will not be accepted by HMRC for the purposes of income tax unless you submit a Form 17 supported by a DoT

    Thank you - that answers my question. I was aware of the need to submit a Form 17 but didn’t know it had to be supported by a DoT.
  • pootleflump
    pootleflump Posts: 87 Forumite
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    Cakeguts wrote: »
    How would your legal ownership affect getting a buy to let mortgage if you need a mortgage to buy?

    Sorry, not quite sure what you’re asking, but it’s not a BTL mortgage - it’s residential with CTL.
  • 00ec25
    00ec25 Posts: 9,123 Forumite
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    pootleflump wrote: »
    Thank you - that answers my question. I was aware of the need to submit a Form 17 but didn!!!8217;t know it had to be supported by a DoT.
    LOL. How did you miss:

    "If you live with a spouse or civil partner and have income from property you jointly own, you!!!8217;ll normally be taxed on an even split of the income between you.

    Use this form if you want to change the split of income to your actual share of ownership.

    You!!!8217;ll also need to provide evidence that your beneficial interests in the property are unequal, for example a declaration or deed."

    https://www.gov.uk/government/publications/income-tax-declaration-of-beneficial-interests-in-joint-property-and-income-17
  • Cakeguts
    Cakeguts Posts: 7,627 Forumite
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    pootleflump wrote: »
    Sorry, not quite sure what you’re asking, but it’s not a BTL mortgage - it’s residential with CTL.

    But you aren't going to live in it you are going to let it. Residential mortgages are for people who are going to live in the property straight after they buy it.

    Buy to let properties are for people who want to buy a house to let. You are buying a house to let. You aren't going to live in it. You say you may live in it in the future but you aren't buying it to live in straight away so you need a Buy to let mortgage not a residential one.

    Have you told your mortgage company that you are not going to be living in the house and are going to let it?
  • pootleflump
    pootleflump Posts: 87 Forumite
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    00ec25 wrote: »
    LOL. How did you miss:

    https://www.gov.uk/government/publications/income-tax-declaration-of-beneficial-interests-in-joint-property-and-income-17

    Because I haven’t looked the form up yet - I know about it because I was told by a helpful person on this forum.
  • pootleflump
    pootleflump Posts: 87 Forumite
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    Cakeguts wrote: »
    But you aren't going to live in it you are going to let it. Residential mortgages are for people who are going to live in the property straight after they buy it.

    My question wasn’t about mortgages.

    My mortgage is already in place - a residential mortgage with Day One CTL. It’s a concession available to us as a forces family. We’re buying it as our family home but circumstances don’t currently allow us to live in it, so not BTL.
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