Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • daniesto
    • By daniesto 5th Jul 18, 2:09 PM
    • 23Posts
    • 1Thanks
    daniesto
    house dispute
    • #1
    • 5th Jul 18, 2:09 PM
    house dispute 5th Jul 18 at 2:09 PM
    my first post here.


    If you buy a house under your name but the deposit was paid by someone like a family member can they claim right to your house? I know in UK banks wants to know where the deposit comes from. There is no documents signed to say the money was given as a loan or gift. If the person can prove it to the bank that they paid the deposit and only using your name to buy the house (all the deeds/documents/direct debits are in you name) will the bank fault you and you would lose the house?
    many thanks
Page 2
    • Pixie5740
    • By Pixie5740 5th Jul 18, 5:59 PM
    • 12,919 Posts
    • 18,573 Thanks
    Pixie5740
    Are you now saying that you received the rent money and not Tom?

    How did the mortgage payments jump up to 1,000 a month?
    • daniesto
    • By daniesto 5th Jul 18, 6:00 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    I shall ask again, who has been declaring the rental income to HMRC?

    Another question, who has been responsible for the repairs and maintenance of the property for the last 15 years?
    Originally posted by Pixie5740

    I declared for HMRC as its all in my name. Prior to me refurbing the house to luxury living there hardly ever repair work. I paid expensive stuff like new boiler, boiler repairs, washing machine, fridge etc. I do not know if he has paid for anything.
    • daniesto
    • By daniesto 5th Jul 18, 6:01 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    To me that sounds as though Paul is the sole legal owner of the property but Tom might be the sole beneficial owner of the property. Could you please clarify:

    1) Who is named as the landlord on the tenancy agreements?

    2) Who has been declaring the rental income to HMRC?
    Originally posted by Pixie5740

    1) Paul
    2) Paul
    • Pixie5740
    • By Pixie5740 5th Jul 18, 6:05 PM
    • 12,919 Posts
    • 18,573 Thanks
    Pixie5740
    Then it sounds as if Tom can jog on.

    Edit:

    I am out!
    Last edited by Pixie5740; 05-07-2018 at 6:26 PM.
    • daniesto
    • By daniesto 5th Jul 18, 6:05 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    3) Did Paul commit mortgage fraud by not declaring the deposit come from Tom or the terms of the "loan"?
    Originally posted by foxy-stoat

    It was given as a gift never as a loan. My broker did everything. I was 20 back then and it was only 164 mortgage but my income was good as I had a fairly good job.
    • daniesto
    • By daniesto 5th Jul 18, 6:10 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    Tom would only be entitled to the rent money if he was the beneficial owner. If your mutual agreement was that Tom received the rent money then it sounds as if the mutual agreement meant Tom was the beneficial owner.

    It's either that or you've been evading tax for 15 years.
    Originally posted by Pixie5740

    mutual as in only a verbal agreement, nothing written. it was only agreed because of my mum. I believe the tax was paid
    • daniesto
    • By daniesto 5th Jul 18, 6:14 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    Are you now saying that you received the rent money and not Tom?

    How did the mortgage payments jump up to 1,000 a month?
    Originally posted by Pixie5740
    it was over payments. I never received the rent money. Property was let out through an estate agent, rent money goes to the agent then from agent to Tom.
    • glentoran99
    • By glentoran99 5th Jul 18, 6:15 PM
    • 5,476 Posts
    • 4,661 Thanks
    glentoran99
    it was over payments. I never received the rent money. Property was let out through an estate agent, rent money goes to the agent then from agent to Tom.
    Originally posted by daniesto
    so what did you declare to HMRC and how much tax did you pay on money you apparently never saw?
    • Lysimache
    • By Lysimache 5th Jul 18, 6:17 PM
    • 176 Posts
    • 64 Thanks
    Lysimache
    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...
    • daniesto
    • By daniesto 5th Jul 18, 6:19 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    so what did you declare to HMRC and how much tax did you pay on money you apparently never saw?
    Originally posted by glentoran99
    it was all done through an estate agent he knew. they said all taxes are paid. I never did pay any attention to it. only recently I start digging into this.
    • Lysimache
    • By Lysimache 5th Jul 18, 6:20 PM
    • 176 Posts
    • 64 Thanks
    Lysimache
    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?
    • daniesto
    • By daniesto 5th Jul 18, 6:21 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    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...
    Originally posted by Lysimache

    Tom had a significant low income, whereas Paul was employed by a respectable company. Paul's salary was good.
    • daniesto
    • By daniesto 5th Jul 18, 6:23 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    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?
    Originally posted by Lysimache

    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.
    • daniesto
    • By daniesto 5th Jul 18, 6:29 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    Then it sounds as if Tom can jog on.

    Edit:

    I am out!
    Originally posted by Pixie5740

    What happened? is this too much?
    • Lysimache
    • By Lysimache 5th Jul 18, 6:32 PM
    • 176 Posts
    • 64 Thanks
    Lysimache
    Tom had a significant low income, whereas Paul was employed by a respectable company. Paul's salary was good.
    Originally posted by daniesto

    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.
    Last edited by Lysimache; 05-07-2018 at 6:34 PM.
    • daniesto
    • By daniesto 5th Jul 18, 6:39 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    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.
    Originally posted by Lysimache

    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.
    • Thrugelmir
    • By Thrugelmir 5th Jul 18, 6:51 PM
    • 59,791 Posts
    • 53,131 Thanks
    Thrugelmir
    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.
    Originally posted by daniesto
    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.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • daniesto
    • By daniesto 5th Jul 18, 7:03 PM
    • 23 Posts
    • 1 Thanks
    daniesto
    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.
    Originally posted by Thrugelmir

    So all in all Paul has a leg to stand on?
    • glentoran99
    • By glentoran99 5th Jul 18, 7:41 PM
    • 5,476 Posts
    • 4,661 Thanks
    glentoran99
    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.
    Originally posted by Thrugelmir

    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.
    • thelem
    • By thelem 5th Jul 18, 7:45 PM
    • 755 Posts
    • 552 Thanks
    thelem
    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.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

1,326Posts Today

7,146Users online

Martin's Twitter