How do I stop my husband being a financial bastard?

[WhatAnAbsolutePenis]

Back ground - we’re married, 2 kids and live in a rented flat. He inherited a house from a friend which he decided to rent out. That’s been rented out for about 3 weeks now and he gets over 1k a month for it.
He works full time and I’m a student in the NHS, including placements and full time uni all year round and I work as well.

Before he inherited this house, we had a shared account for bills and rent. He put in about £600ish a month and I put in £400 and we used to get tax credits.

We are no longer entitled to tax credits.

He has a few weeks ago thrown in my face that he pays for everything. Food, bills and rent.

We had an argument today and he’s done it again. Obviously he puts a significant amount in now because he gets the rent and has to replace the tax credits that we are no longer entitled to.

We just had an argument about the front door (he loves to bitch about the flat. I’ve lived here for years before we were married and he makes it clear that it isn’t up to his standards, the Windows, the kitchen, the bathroom, the front door etc eyc) and yet again he threw in my face that only he pays the rent.

I told him fuck the fuck off and don’t come home tonight.

I’m perfectly fucking capable of paying the rent without him. He can move out. Problem solved.

What exactly does he expect me to do, ditch my degree and my career, somehow inherit a house just so we can be on an even keel with money?!

What kind of absolute bastard throws this in their wife’s face every time they have any argument?

The house has only been rented out for 3 weeks, is this it now? This being thrown in my face every 10 seconds?

When you sell a house that you use for rental income you would be liable to pay Capital Gains tax on the money you gain from selling it. If you had bought it then I think they just look at the profit that you made... so they deduct the price you bought it for from the price you sold it for and this is the amount you have to pay tax on. Everyone does have a capital gains tax allowance each year and so you only pay tax on the amount of profit over your CG tax allowance. So if you made £25K profit and the tax allowance is £10K then you only pay tax on £15K. However because he inherited it it may well be that the whole of the amount that it sells for would be liable for Capital Gains so if it sold for £150K he would have to pay tax on £140K. Of course you both have a CG tax allowance and so it being in both your names would be very sensible as you would be able to use both Allowances which means less is taxable... HOWEVER... if you don’t own your own home (mortgages are irrelevant here) then I think it can be considered as your primary residence and so not liable to CG tax. No one has to pay CG tax on their primary residence when they sell it... and in the past people, notably MPs, flip their primary residence from house to house when they have a second home to avoid paying CG tax on either property. I think they closed the loopholes on the flipping aspect but as you only own one property that shouldn’t affect your situation. I can’t guarantee I am right but I would check it with the solicitor. I have use ‘you’ for simplicity but I do realise that the house is currently solely in your DH’s name... which is probably not the most tax efficient state either... is it your combined income that has stopped the tax credits or has he gone over a threshold with his?? I know very little about tax credits except some government benefits are based on individual income rsthrr than combined. Of course him being a dickhead remains the main issue. Hope this helps... also please note I have used £10K as the CG tax allowance purely to demonstrate what I meant... it is currently actually a bit higher at £11,700 (I just checked), anything over that you pay 20% tax on unless you are a higher rate tax payer... I think!

That is really really helpful. I will be writing this down and asking the solicitor tomorrow.

We now don’t get tax credits because the money we get from the property is considered an income. Which, with his earnings and my earnings, takes us over the threshold.

Thanks again for taking the time to explain that to me. I didn’t know any of that stuff.

Also he can sell a house with a tenant in it. You often see properties for sale as investment properties with that guaranteed income from the tenant so just because the tenant has 12 months to go on the lease does not mean the property cannot be sold now and hte money used to buy the two of you a family home which is free of CGT, probably with your tax credits restored and without tax due on the rent with security for your family for the future.

Well he’s back to being a nasty arse hole this morning. Kids asked where he was going, he said “work, someone’s got to.”

As though I don’t work my arse off.

I told him I was seeing a solicitor today. He demanded to know why? Why was I spending money on a solicitor when we have no money?
I’m spending my money on a solicitor. Not family money.
He said “you do realise I have my own solicitor?”
Great. I’m pretty sure we’ll need one each when we divorce.
Then he kept going on about having no money.
It doesn’t matter if he has 5p or 5million, it’s the fact that he’s slamming my face in it.

Sorry, rant. Fucking arsehole. We’ve got holiday next week as well. Great.

Well he’s living up to your MN name, isn’t he? Random question but.... Does he hate his job?

Good luck for your meeting with the solicitor today - hopefully it will give you all the facts that you need.

This could escalate very quickly if he feels threatened or cornered. You said in a earlier post that you do still love him so, even though he is behaving like an abominable twat, I think it would be useful to take a (tiny) step back and try and have another proper talk with him about this with the new information you have learned from this post (about the house and its income being a shared asset not just his). He either doesnt realise he is being so unfair in which case he needs to be made aware (somehow - I dont know how) or he does realise he's being a twat in which case carry on full speed ahead and LTB.

I had intended to take a step back and have a calm conversation but he woke me up this morning I was tried and am argument happened.

I should have just waited until he’d left for work.
I think he probably already feels cornered. I think I’ve already buggered that up.

PlainlyCrackers no he doesn’t hate his job. He enjoys it, but it has stressful points and rubbish points. He’s self-employed so can accept and turn down jobs that he does and doesn’t want to do.

I will update later with what the solicitor said. I think it’s important if anyone else is reading this and might be in a similar situation in future.

Can you get a bit of time with him alone at a quiet calmer time, perhaps to talk things through, maybe this weekend?

Yes, this was my hope. I’m working a 12 hour shift on Sunday so it will have to be before then.

However because he inherited it it may well be that the whole of the amount that it sells for would be liable for Capital Gains so if it sold for £150K he would have to pay tax on £140K

You are taxed on the difference (if there is one) in the value of the house when you inherited it and the value of the house when you sell it (less legal and estate agent fees and works done to improve the house e.g. new kitchen or an extension but not decoration and superficial work.)

if you don’t own your own home (mortgages are irrelevant here) then I think it can be considered as your primary residence and so not liable to CG tax. No one has to pay CG tax on their primary residence when they sell it

I wish that were true but the fact you are renting to live elsewhere rather than owning the flat you currently live in makes no difference. It is not your primary residence and that is clear from the fact that you are renting it out. So you would have to pay CGT if it is sold for a higher value. If you have never lived in it, you do not qualify for "lettings relief" either. Right now I would imagine the gains would be small enough to be covered but obviously the longer that goes on, the more exposed you are to the tax risk. And all the while you are paying income tax on the rental income and losing your tax credits....

If you are married, even if you live in different properties, you can still only nominate one primary residence between you. Because they treat married couples as a team!!

Thanks mirialis someone with proper knowledge rather than my vague ideas!

So the probate valuation is used as a substitute for purchase price which is good news unless the probate valuer put a low end value on it but still much better than the whole sale price being subject to CGT. It’s a shame about the primary residence rules - But I guess it’s not surprising that they are rigorous about things as so many people were playing the system at one time.

Good luck with this afternoon OP

And the husband needs to be told that the HMRC Connect computer system automatically checks the Land Registry property register so he cannot hide the facts he holds a rental property on which he needs to pay tax on the rent (if his self employed income plus the rent takes him over the single person tax allowance of about £11,300 which I assume it will).

The solicitor just sent me this.

So we wont be discussing tax. That’s unhelpful. But it also says we won’t be discussing inheritance. Presumably this isn’t an issue because it’s not longer about inheritance and is about a house that my husband owns?

I did email him and ask.

Xenia he does pay tax on the rent. I’ve said this so many times. I know that he does.

He may be an absolute penis, but he isn’t fraudulent.

Presumably it's about your position if you split up. What you are likely to get and are entitled to. If you need tax advice, see an accountant.

It's worrying here's already got a solicitor. It sounds as if he's acting on advice to protect it all in his own financial interests. Which doesn't bode well for your marriage.

Tax advice to minimise tax paid I mean. But that would mean using your allowance and joint ownership and that isn't what's happened. He's addicting in his own best interests not in the family's best interests.
Our rental property is in my name to take advantage of my tax allowance.

No he has a solicitor because of something to do with the house, I can’t remember what but it was way before we had any issues. It was house, inheritance, land related. I can’t even remember now.

Maybe his solicitor is just the person who dealt with him when he inherited the house rather than him having sought out a solicitor for nefarious reasons.

All the tax info and stuff is available on the HMRC website so that's ok. What you are really trying to find out is where you and the children stand in the event of a divorce given your particular circumstances and that is what you need a qualified solicitor to advise you on.

ah x post.

I would also say re: tax etc. Sometimes you've just to make the decision to "lose" money if it makes for a better quality of life (e.g. not having to live somewhere you don't want to). But you, as a couple, should make sure you both independently and jointly understand all the financial implications, go through the cost v benefit list together, and come to that decision together. Assuming one person in the partnership is properly clued up and leaving it all to them is a mistake many, many couples make.

HOWEVER... if you don’t own your own home (mortgages are irrelevant here) then I think it can be considered as your primary residence and so not liable to CG tax.

My understanding is the opposite, ie you have to actually live there for it to be considered your primary residence.

A family member who buys and does up houses for a living always goes to great lengths to make sure that all the paperwork makes it looks as though he lives in the properties he develops. He uses that address for his bank a/c's, DVLC etc, registers as the council tax payer and so on. His wife and kids live in rented properties elsewhere if the house is uninhabitable while work is going on, and his name is never on anything to do with that address. He was advised to do this by his accountant, to make sure that there is nothing to suggest he lives elsewhere and risk being hit with CGT when he sells.

He could be being unduly cautious, I suppose, but it kind of makes sense to me.

(Iam sorry about the rent point. I just haven't read every page. Apologies. It is as I said on my first post financialy silly to be paying 20% or 40% tax on rent and later capital gains tax on sale if thee property goes up in value and at the same time losing tax credits when instead you could all live in the hosue and be better off or sell it and buy a family home together> the HMRC Connect system will also log that he owns the property and he may well have to pay 28% CGT on any gain in the period he owns it which he would not have to do on the family home)

Hi OP - not expecting an update or anything but I've spent the day with my friend who was having similar DH issues today and thought of you. Hope the meeting was helpful and addressed rather than created problems.

Update- I saw the solicitor who was lovely and empathetic.
He immediately told me that if we were to divorce then the house would start off at 50/50 and the judge would then look at what we needed. As the meeting continued it transpired that things were quite that simple, which I will explain in a sec.

He gave me loads of information on tax, how it would be better in my name as well so I could utilise my tax relief so if I get paid £600 one month then we could use £400 of the tenancy money as my income so we don’t pay tax on it. If it’s just in his name then it’s just his income then he pays tax on every penny of it.
He also told me that DH absolutely has to have a will if he dies it becomes complicated with regards to the children’s young ages and what the receive.
He told me about capital gains tax and we discussed a few other things as well.

Going back to the 50/50 thing - we’ve been married for 2 years but together much longer. The solicitor assumed that we had been living together that whole time which we hadn’t. Only a year prior. So it wouldn’t be as much as 50/50 because they do it from the day of living together. That’s not to say I would get nothing, just that it wouldn’t be so simple.

I spoke to DH who was apologetic. He said he didn’t mean it how it sounded. There is a reason for this which I can’t be arsed to explain. I understand the reason and it makes sense but it doesn’t make what he said any less. He still said it with patronising conviction and it was deeply unpleasant.
I discussed having my name put on the house (we aren’t sure if it’s possible yet) to get the most out of the tax relief and give me more security. I discussed a good few other things and laid it down thick that we are equal and that a judge will see us as equal in the event of a divorce (I didn’t tell him about the revelation later on in the meeting) so we should be equal now.
He listened he took it in and I believe things will improve.

I really appreciate everyone’s help and input.
Money can turn even the nicest, kindest people into complete bastards. I’m learning that now, and the more people I talk to in RL the more I hear about it doing the same to others.
I’d like to think I’ve nipped this one in the bud though. We have been together for many years, we have an otherwise excellent relationship (another reason why I’m fucking incredulous to this latest issue) so I believe that we can get over this —ego— hurdle.

Thanks again.