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  • FIRST POST
    • VictorH
    • By VictorH 12th Jan 18, 8:57 PM
    • 2Posts
    • 0Thanks
    VictorH
    Tenants in common - percentage share question
    • #1
    • 12th Jan 18, 8:57 PM
    Tenants in common - percentage share question 12th Jan 18 at 8:57 PM
    Hi

    I have been searching but failing to find a clear answer to my situation. Hope someone can shed some light on this specific subject. Many thanks in advance!

    My mum is helping me to purchase a property for me to reside in so that I can buy it without any mortgage. She wants to hold a small share of the property even though she is going to contribute to large part of the total cost. We thought Tenants in common would be the way to satisfy our need. So my main question: Does the percentage of property share have to be based on the percentage of contribution to the purchase or can it be defined in any way we like?

    For example, my mum contributes 70% of the total cost and I contribute 30%. But if she is happy to be allocated 20% share to my 80%, is this possible in the deed of trust?

    If this is possible, my second concern is whether it would figure in any potential inherence tax (potentially exempt transfer) in the future (not the 20% she is holding but the 50% she had effectively passed to me when we purchased).

    Thanks for the help
Page 1
    • Keep pedalling
    • By Keep pedalling 12th Jan 18, 9:04 PM
    • 5,079 Posts
    • 5,663 Thanks
    Keep pedalling
    • #2
    • 12th Jan 18, 9:04 PM
    • #2
    • 12th Jan 18, 9:04 PM
    You can split it anyway you like, but if your mother already owns a property don't forget you are going to be paying an extra 3% in stamp duty if you do it this way.

    Yes the 50% would be a PET as far as IHT is concerned, but why is that a worry? If she retains it all as a shared ownership then it would stay in her estate for life rather than 7 years.
    • Tom99
    • By Tom99 13th Jan 18, 2:54 AM
    • 2,218 Posts
    • 1,501 Thanks
    Tom99
    • #3
    • 13th Jan 18, 2:54 AM
    • #3
    • 13th Jan 18, 2:54 AM
    If the 3% extra stamp duty does apply this can be avoided by your mum granting you a loan with a charge against the house. Any interest you paid on the loan would be subject to income tax on you mum.
    So she can gift you say 70k and lend you 30k.
    • VictorH
    • By VictorH 14th Jan 18, 10:10 AM
    • 2 Posts
    • 0 Thanks
    VictorH
    • #4
    • 14th Jan 18, 10:10 AM
    • #4
    • 14th Jan 18, 10:10 AM
    You can split it anyway you like, but if your mother already owns a property don't forget you are going to be paying an extra 3% in stamp duty if you do it this way.
    Originally posted by Keep pedalling
    Thanks! That is a great point I didn't think of.
    • getmore4less
    • By getmore4less 14th Jan 18, 12:02 PM
    • 32,172 Posts
    • 19,327 Thanks
    getmore4less
    • #5
    • 14th Jan 18, 12:02 PM
    • #5
    • 14th Jan 18, 12:02 PM
    Why does she want to keep a share?
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