STBXH and his buy-to-let

[PinkCheesy]

H and I have been separated for nearly 2 yrs. it's extremely amicable, we get on well, just bored and grown apart. Our children are young adults who live at home (when not at uni) - one with him and one with me, but it's only 5 mins away. He will sign the family home over to me once mortgage is paid off in 3 yrs or so, as I can't afford the mortgage alone and don't earn enough to have one only in my name. He lives in an inherited house solely in his name. We can't divorce until house signed over to me because of CGT. He pays me a lump sum monthly to cover all bills, mortgage, and some maintenance. I was a SAHP for many years as his job meant he was away a lot. We are both happy with our current arrangement. We have not made a formal separation declaration because of the house issue.

My pension is pretty poor, ie I will get basic state pension at 67. My mother will die at some point within the next 10 yrs and her intention has always been that my inheritance (50% of two houses and a massive amount of invested cash) will make up for lack of pension. I'm 53, work part time on minimum wage.

Should I be expecting some of H's pension or would it be reasonable to not take it?

The other thing is that he's recently bought a BTL property, having been thinking about it for about 10yrs. I knew he was looking, but he says he hasn't done it yet. However, after reading a tip in a divorce article, I searched for his name in Companies House, found a newish company he's set up alone, and there's a property purchase, complete with BTL mortgage, dated early December. I checked the property on Zoopla and it's not listed as sold so perhaps the sale hasn't completed yet, so he isn't lying.

Should I Assume he's doing this through a company for tax reasons? His pension and PAYE is hugely complicated and pre-Covid his marginal tax rate was around 75% some months Or is there an ulterior motive? If he reneged on his verbal promise, and I had to sue for money, would this count as his asset or not? Should I let on that I know about it? I have never had cause to distrust him but I feel I ought to know about this. Please advise!!

Oh and he's been seeing a woman for a while, she seems nice and the kids like her, and her kids, but she's an extremely wealthy business accountant (divorced) and I'm sure is very good at advising him on stuff

Get it put in writing about the house and personally I wouldn't go after his pension if I didn't need it

You have got s fantastic deal there, just let it be.

Get proper legal advice.

Am I tight in thinking there's only three years left on the mortgage? If so I don't understand why you couldn't get a job to sort this out now.

I suspect the amicable nature of your separation may be because that's suited him and you shouldn't be surprised if this changes now there's a new (possibly well informed in divorce matters) woman on the scene.

I'm 53, work part time on minimum wage.

Why are you working part time on minimum wage, what is stopping you working more hours/ getting a better paid job?

@CorrBlimeyGG

I'm 53, work part time on minimum wage.

Why are you working part time on minimum wage, what is stopping you working more hours/ getting a better paid job?

I only went back to work four years ago after being a SAHP (I did a lot of voluntary useful stuff in that time as well!) and recurrent depression makes it very hard for me to work more hours than I do. My pre-child career essentially no longer exists and I have no post-school qualifications. I work in the NHS, love my job and my employer has been very flexible. They can't pay us more than they have available, but I'm happy with it as I'm now very content in both home and work life - which is a pretty new thing for me!!

Yes I think so you only broke up on the last 2 years so the marital hone, his pension and his inheritance should all be on the table. If you want to be nice I'd take the inherited house off the table but the pension is half yours as is the marital home. You need to see a solicitor and ask for a full financial disclosure.

You probably could go after his pension / inheritance but it seems on the surface you’re getting a good deal.
Neither of you need to house a child so neither of you really needs more for a house.
You’ve said you’ll inherit a large sum at some point. He has already inherited so don’t think you should take any of this.
He still pays for at least part of the bills for the house you live in.
You currently choose to work part time.
But really it’s amicable and if you go after more you could damage that relationship and have impacts for the future (eg your childrens weddings)

On the surface it sounds fair and you get along so I'd leave it personally.

The separation has happened, and if he fails to report a transfer of the home for CGT that is tax evasion. There's no point pretending you are still together to save a bit of tax.

You should see a solicitor.

I would be worried about the new woman objecting to him signing over the house to you in 3 years. I’d get legal advice on that unless you think he’s 100% trustworthy.

Broadly I think you have a good deal though.

You are bonkers not to have this looked at by a proper divorce lawyer. Separations are often VERY amicable…when the financially stronger partner is getting a good deal. 50:50 of EVERYTHING is the starting pt … and that incs pension provision.

And you don't have to justify working part time you've spent 20 plus years running his home bringing up his dc now at 53 probably menopausal with outdated work place skill sets you shouldn't t even be thinking about full time work. You should have a mortgage free home, he needs to share his pension provision with you and part-time work will pay your bills moving forward or you can choose to move to a smaller property in 5/10 years when the dc leave home. If he's genuinely nice and amicable full financial disclosure won't be an issue and if it isn't genuine full financial disclosure is imperative for you.

He has probably bought his investment property thought a limited company for tax reasons, no other reason. His businesses would make part of the ‘pot’ as would his pension, house and other assets but seeing as you have no dependents and are getting a good deal already, do you need to go there?

You need a shit hot lawyer.
You should be getting at least half of all assets built up during the marriage - regardless of who “earned” then. That includes his pension. He wouldn’t have been able to earn that wealth if you hadn’t done all the child rearing.

CGT doesn’t stop you divorcing. He is bullshitting you and relying on your financial naivety.

@MrsMcGarry

You need a shit hot lawyer. You should be getting at least half of all assets built up during the marriage - regardless of who “earned” then. That includes his pension. He wouldn’t have been able to earn that wealth if you hadn’t done all the child rearing.

CGT doesn’t stop you divorcing. He is bullshitting you and relying on your financial naivety.

He's signing over the house to her - she could end up with less not more.

@MrsMcGarry

You need a shit hot lawyer. You should be getting at least half of all assets built up during the marriage - regardless of who “earned” then. That includes his pension. He wouldn’t have been able to earn that wealth if you hadn’t done all the child rearing.

CGT doesn’t stop you divorcing. He is bullshitting you and relying on your financial naivety.

It doesn’t stop you divorcing no but it reduces the tax burden. If you’re worried it might make sense to divorce as soon as you can.

He’s signing over the house whilst living in another house and purchasing a buy to let.

And being not divorced does not reduce CGT at all. What affects (his) CGT bill is if he gets money from the sale of a house that is not his primary residence. Which he isn’t getting because there isn’t going to be a sale(and if a house is signed over as part of a divorce settlement there is no CGT

Go for the pension, it’s probably worth more than the house. I never understand why people ignore how useful a pension is, especially as paying into the pension was done with family money

@MrsMcGarry

You need a shit hot lawyer. You should be getting at least half of all assets built up during the marriage - regardless of who “earned” then. That includes his pension. He wouldn’t have been able to earn that wealth if you hadn’t done all the child rearing.

CGT doesn’t stop you divorcing. He is bullshitting you and relying on your financial naivety.

What makes you think I'm naive?!! I totally understand the implications and in fact was the one who looked into it and found that he will be left with a £150k CGT bill if we are divorced and then he signs the house over to me - it's still an 'asset sale' even if no money changes hands. We are not planning on selling my house at any point, as it's my forever home. As we are informally separated, HMRC considers us to be married and as such have a joint residence, even if we actually live separately. He is entitled to put it into his spouse's sole name and not be subject to CGT. At that point we will begin divorce proceedings.

Thank you to those who gave helpful suggestions! I think I'll have a bit of a financial chat with him in the new year and ask him about the BTL and whether the mortgage on it could impact on me at all, and then lead into what he's considering to be a fair financial split in the future. I do trust him, but I also know that he can be quite secretive, so it might surprise him that I know about the BTL and make him realise I am more astute than he thinks! I doubt the girlfriend will be having any designs on his cash as she is independently wealthy as well as having had what he calls a 'good settlement' on her own divorce. Neither of them is interested in remarrying or living together for at least the next ten years. TBH I think he's only interested in her for the sex and because she's not financially dependent on him

OP, I think you are being incredibly naive.

He's being nice to you because it suits him.

He’s bought the BLT through a company because it’s cheaper tax wise than having it as a personal mortgage as he is clearly a higher rate earner.
This is standard practice for investment properties since they phased out the tax relief on BTLs.

That said, he’s clearly not told you for a reason.

However I think your deal sounds reasonable, do you need half the pension and half a BTL property? With your inheritance and a mortgage free house?

@Ohpulltheotherone

He’s bought the BLT through a company because it’s cheaper tax wise than having it as a personal mortgage as he is clearly a higher rate earner. This is standard practice for investment properties since they phased out the tax relief on BTLs.

That said, he’s clearly not told you for a reason.

However I think your deal sounds reasonable, do you need half the pension and half a BTL property? With your inheritance and a mortgage free house?

Thank you. I didn't know about the previous tax relief on BTL, so it does make a lot of sense. I am absolutely not planning to insist on 50% of that - he's paying for that from his own current earnings, not assisted by me at all, and he is after all entitled to invest! I am only concerned that should anything go wrong with it that his BTL mortgage is linked to our joint finances and could affect all of those, possibly leading to my house having to be sold. Anyway, I shall have a chat with him.

I am storing quite a lot of his stuff (valuable as well as sentimental stuff) in my attic and garage, because he hasn't got space in his house. He is well aware that should he play dirty, I would have no hesitation in selling/binning his stuff Perhaps I need to gently remind him of that....

I think that a lot can happen in three years. I think you need to see a solicitor to 1-be sure you're getting a fair and equitable deal and 2-draw up a binding document so he can't renege on it.

And you don’t think it’s worth seeing a solicitor??