Parents and property

[Fedduup32]

Please be kind I’m not in a good place at the moment mentally.

In my early 20’s my parents put a rental property in my name. Not all as good as it sounds. I’m in my 40’s now and because of this property was unable to get first time buyers mortgage when I was looking for my own place so didn’t get a good deal that I could have.

Over the years whenever I bring up any conversation it ends in my mum screaming at me and threatening to put the property in one of my siblings name instead. I’m really upset as I came to visit my mum with kids and mentioned our flat is too small and I would love to get a bigger place and asked her if i sold the property how much would I get so could use as a deposit so I can get a nicer place. She got unreasonable again which resulted in me screaming at her too, not a nice thing to be honest. In the end I managed to get info from her that the rental gets £70 profit a month so in 20 years of this I asked her if I can have my money and she starts screaming at me.

After a lot of shouting today I finally learnt truth from her that she only made me buy the property as her accountant told her it will make more sense money wise to put in one of the kids name as they would have to pay tax etc. I feel really used by her but also guilty that she’s my mum but I feel sad that she never thinks about me or any repercussions it has had in my future finances and opportunities.

She doesn’t even clearly talk to me about anything to do with the property. I don’t even know if it was hers first then she put in my name for tax or first time buyers rate. I just get made to feel unreasonable if I ask any questions. My siblings were there today as well and they made me feel I am causing trouble but also admitted they glad she didn’t put in their name as they would have missed out on first time buyers with their property. I just wa t answers from her but she threatens all sorts.

I’m lying here feeling bad I brought up the topic but why can’t she just have a conversation with me about it. I don’t know what she’s hiding as she gets defensive.

The way they are acting is very unreasonable and definitely not normal - I feel sorry for you

She needs proper advice before even considering selling.
She’s got a tenant in the property with a legal right to be there who thinks the op is her landlord. A contract stating as much with legal obligations to that co tract and tenant.
And that’s before she starts to unpick the family mess.

Sorry but you are to blame for agreeing to all of this. Your parents are only controlling because you allow it. Get the paperwork together and sell the property

Anyone who writes this, knows absolutely nothing about coercive control. Please ignore OP.

Counselling would definitely help you to unpick the emotional hold your parents have over you and how you've been scapegoated.

You also need a solicitor to unpick the legal side.

I also agree with the PP who said that they are likely to have remortgaged several times, otherwise the rental yield should be higher than £70 a month. Is it possible that they used the equity to buy other properties without telling you?

I wouldn't have any moral compunction about selling the property and keeping the money. They have basically defrauded you and you are within your rights to be compensated. If the equity is more than you would have had if you had bought your own property, you could always return the excess. However, my fear is that there is very little equity left. I wonder if you are entitled to sue them for any equity taken out of the property without your agreement.

Couple of points.

1. 3% Stamp Duty surcharge would not be payable by OP if she replaces her current main residence with a new main residence.
2. Mortgage interest is no longer deductible from rental income. Instead, a credit equal to the mortgage int at 20% is given against the tax due. A t/p who remains liable at basic rate taking into account the full rental income will not therefore pay any more tax. Higher rate t/ps will lose out. Anyone making a loss will also lose out. If OP's parents are higher rate t/ps they will be benefiting. They would pay more income tax, and CGT, if the property was in their own names.

Also, there is every chance that OP can sell to another landlord who will happily take on the tenant. There are lots of property companies who do this. They will pay a reduced price, but they will deal with looking after the tenant and inspecting/upgrading/refurbishing the property.

Something doesn't add up here. Firstly, the first time buyers rate which you keep on about has only been around for a couple of years, secondly, £70 per week profit? How? If you are being assessed on the income for tax purposes how does your Mother receive this money? If the property was bought 20 years ago why is there still such a massive mortgage that it is only paying this piffling profit?

Sell it!!!

How much longer is left on the mortgage?

Can your DP buy a property and get First time buyer benefits? Then when you remortgage put you on it?

@kidsatuniemptynester

Something doesn't add up here. Firstly, the first time buyers rate which you keep on about has only been around for a couple of years, secondly, £70 per week profit? How? If you are being assessed on the income for tax purposes how does your Mother receive this money? If the property was bought 20 years ago why is there still such a massive mortgage that it is only paying this piffling profit?

It is probably a BTL mortgage as this is the only legal way to get a mortgage on a property you intend to rent out. So it will be interest only. The £70 will be what the parents keep after the mortgage payment comes out. This is likely to be on direct debit, but it sounds as if OP doesn't see her bank statements as she has been coerced into signing over control of the account to her parents. OP needs legal advice regarding this as banks can be difficult to deal with and have probably been told OP is o9ncapable of managing her own affairs.

@endofthelinefinally it might not be - I have a normal residential mortgage on the house that I rent out and then pay the mortgage company for permission to let every year.

Sell it OP. The house is almost certainly registered so you can get the details from the Land Registry and see what the official ownership position is.

Once you know that, you can decide whether to sell it completely (and you'd have to evict the tenants which would be a complication) or sell it on with the tenants in situ. Then you can take the money left over from paying any outstanding mortgage and use it to buy your own place.

And tell your screaming mother to bog off when she screams at you again. What makes grown adults behave like toddlers?

I would speak to a counsellor and try and get support and the confidence to speak out.

I would also get proper legal advice.

BTL mortgages don't have to be interest only. I have a repayment one.

Alternatively, OP, you could keep everything as it is and just deal with the bank situation. Move the account - get legal advice to do this. Then employ a managing agent while you decide what to do.

Something doesn't add up here. Firstly, the first time buyers rate which you keep on about has only been around for a couple of years, secondly, £70 per week profit? How?

Its £70 per month, not per week.

OP you need to do a bit of digging before you mention this to your parents again.

1. You need to see a copy of your tax returns filed, the property purchase paperwork and mortgage information. If you don't have these available book in with the accountant, they have all of this on file.
2. Arrange for a meeting with the bank to revoke your parents access to the rent account in your name. They should have never had access to this in the first place.
3. Once you figure out the totality of the situation you are free to do what you want. Sell, keep the property without you parents involvement. I don't advise you giving or selling back the property to your parents for a nominal value - the tax bill YOU will have to pay on the current market value will be massive. If you speak to the accountant he can explain this further to you.

Your parents knew exactly what they were doing when they didn't purchase this property in your name including the 'risk' that they don't own it simply to save them a tax bill! It's your property, not theirs!

BTL don’t have to be interest only so whoever posted that is misinformed. It may be but until the OP shows some curiosity about the financial and legal arrangements she is embroiled in we will have no way of knowing

@MissLucyEyelesbarrow If you don't live in the property it's treated differently for CGT. There were some rule changes a few years ago which may mean the liability isn't huge but there will be a liability.

On the income tax front the income is in OP's name even if she isn't really seeing the money it is her liability and depending on various factors she could be affected. If working she could be having her zero rate personal allowance used by rental income or be in a higher tax bracket due to rental income. We don't have enough information to say for sure, the only certainty is the liability is hers and not the parents who are pocketing the income.

You can contact the bank about the mortgage
You could change the mortgage & the bank

You can contact the letting agency about the rental agreement & change rent to be paid directly to you
You can change the letting agency

You need to do some investigations yourself

20 years is a long time

This is awful OP, am so sorry you have been treated this way - they have lied to you and cheated you out of money - they keep all the profit and you pay the tax on it - WTAF??!!

Agree would be good to get some counselling to strengthen you for what you know you need to do, but in the background:

Get the land registry records and confirm it is in your name
Get copies of your tax returns
Go to the bank and check what the deal is on this account and how you would go about changing their access
Get the property valued

This is just so mean and deceptive of them, but you could turn out to have a bit of a nest egg, which you entirely deserve!!

Aside from the situation with your family, why does this mortgage affect your ability to buy a bigger place? It should be a BTL mortgage firstly. Second, if you’ve had it for at least 20 years, you must be near the end of its term so the amount outstanding should be low-ish.

Have you tried speaking to a mortgage broker?

Unless it’s an interest only mortgage of course.

Benjispruce5 you say she should not sell it as as you see it as her parents property morally but she can't just hand it over if she wants out due to tax implications. So should she be stuck with it ? It is unfair that she can't be free of it because she states she has to pay tax each year.

Hi op, from your latest posts it looks like they have power of attorney on your business account? You need to cancel that ASAP, but first try finding out what the financial position is, as if they did put you in debt with multiple mortgages etc they can be blamed then. Then sell it off, and tell them to speak to your lawyer. I lm so sorry you're in this horrible situation, can only imagine how scary this all is to you, and you've been used to their control and coerce. You can change this, believe in yourself. Your mum sounds abusive, read threads here on abusive mums, you're not alone. Imagine how wonderful it'll feel to break free and give your own decisions.

OP, when you speak to your bank etc, tell them you believe you are being financially abused by your parents. It might be useful in case of future fraud/tax investigations to get it noted somewhere. It will also help the bank to protect you.

I believe some banks now have a specialist advisor to help in financial abuse cases - usually it's a romantic partner who is abusive, but I imagine familial financial abuse would also be eligible. They won't be able to sort of this tangled mess (you're going to need solicitors and accountants for that), but they can perhaps put extra safeguards in place in case your parents try to regain control or return to the bank using the power of attorney.