1 Removing name from property deeds

[glider2626]

Hi,

I’m asking this on behalf of my brother-in-law (let’s call him Keith!). Keith’s parents bought a home in 2013 and put their two names on the property as well as Keith’s (3 joint tenants). All 3 are still alive. At the time of the purchase, Keith had recently gotten married. It turns out that Keith’s wife was only after a British visa (and subsequently passport) and he now wishes to divorce her, but is concerned that she may go after his share of his parents’ home (among everything else). In order to avoid this, he would like to simply remove his name from the property deeds, leaving his parents as (two) joint tenants. Upon the death of the second parent the property would then be inherited by the (four) surviving children, according to normal inheritance rules. For completeness, Keith also owns his own (modest) home, where both he and his wife currently reside. She is refusing a divorce. There is no mortgage on the parents’ property.

What is the procedure to remove a name from property deeds and is stamp duty (or capital gains tax) payable in a situation such as this? If so how much?

Thank you.

just to add, they have no children (together or separately).

In effect your brother will be gifting his one third share of the property to his parents for no consideration; however for CGT purposes market value of his one third share is used to calculate the liability. He can take off the purchase price and any associated legal and agents costs on the purchase along with any capital expenditure he has made in the meantime.
He has a CGT allowance of £6000 to take off the liability and then tax is payable at either 18% (basic rate taxpayer) or 28% (higher rate tax payer)

If his wife gets a good divorce solicitor it won't make any difference if he does this as they will come after it anyway. Especially as they have been married for 10 years.
Out of interest, why was his name put on the deeds in the first place. Did he contribute to the cost? If not, it may be worth the three of them consulting a solicitor in order to swear an affidavit to set out the position. Don't think that would wash with HMRC though.
There is no stamp duty consideration.

*along with any capital expenditure that has been made, not just by him.

Depends on the length of the marriage. She can refuse divorce all she likes, but your bil can go through with it without her consent. There’s nothing stopping him from divorcing her.

There is no point doing this. Unless his parents pay him one third of the value of the property, this would be viewed as a transaction intended to prevent or reduce his wife's financial settlement. The courts can therefore set aside the transaction, leaving him in exactly the same position as he is today.

As @LadyGaGasPokerFace, he doesn't need her consent for divorce. He can go ahead with it any time he wants.

Id be very interested to know why they actually put ‘Keith’s’ name on the deeds! Were they trying to ensure they wouldn't have to pay care home fees in the future?
Keith’s wife isn't going to go after a share of his parent’s house - she’s going to go after what she’s entitled to - a share of Keith’s house! Ie, 1/6th of the equity.

Legalities aside, the value of Keith's share probably isn't clear cut. Yes arguably she has a claim on his share, but even if it is 50% (1/6 of the house), the question is what is the "market price" of that 1/6th which is hard to determine as the pool of people looking to entertain purchasing 1/6 of a house would be fairly small given they wouldn't be able to live there. Ie it isn't just a case of how much is the whole house worth divided by 6. Keith really needs to seek advice.

Wrong. Keith's share is one third of the house, so it is worth the value of the whole house divided by three. If she gets 50% of Keith's share, she gets one sixth of the value of the whole house.

@prh47bridge

I haven't said that she doesn't. My point was that the question as to the value of the 1/6th (50% of the 1/3) is valued may not be clear cut. My specialism isn't property/divorce law, but I have received advice on a very similar issue which is why I said he needs legal advice.

@poppitypop1 You were suggesting that the value of the 1/6th may be what someone would be willing to pay for 1/6th of the property and specifically said that "it isn't just a case of how much is the whole house worth divided by 6". I was pointing out that this is wrong. In divorce, it really is a case of how much the whole house is worth divided by 6.

As I said I've received advice on a similar point. As an aside, my area of law frequently involves elements of divorce and it is surprising just how often the divorce lawyers do not realise how my area can change a position. If this is you're actually qualified and specialise in this specific scenario then I'll stand corrected. Otherwise we'll have to disagree and I stand by the fact that it maybe Keith can advance certain arguments and that he needs legal advice.

Thank you all, that is very clear and sensible. Regarding why K’s parents added his name to the deeds at the time they bought the house when he had just married someone whose motives were so clearly questionable, it’s down to a mix of 1. wanting to look after one child (in their eyes the most vulnerable) above the other 3 who were “sorted” and 2. being stubborn and unable to seek/accept he most basic, logical legal advice 3. being blind and optimistic in the face of what was obvious to everyone else. The 4 children get along and all the parents had to do was to let normal inheritance law do its work. The 4 children were always going to look after each other.

There are certainly arguments as to whether she is entitled to one sixth of the value of the property.

@prh47bridge I didn't say she isn't entitled to a 1/6th. I reconfirmed that in my last post. Shame you missed that (again).

My point re arguments was re the precise value of the "market value" of 1/6. As I said I've received legal advice on a very similar point which is why my suggestion was for Keith to seek advice.

Again, if you're actually qualified and have experience on this I'll stand corrected, in the meantime given the advice I've previously received we'll have to agree to disagree. Rather bemusing you can't handle that. I'll leave you to look for an argument with someone else at this point as you seem to be wilfully misconstruing my posts.

I was agreeing with you on that point.

I don't know what advice you have received. I have nowhere said I can't handle that. I have merely tried to explain how this works in divorce, which you have admitted is not your area.

The question in divorce is the value of Keith's assets. Unless the house is owned as tenants in common and there is a declaration of trust, Keith, his father and his mother each own one third of the property. The value of Keith's share is therefore one third of the market value of the house. That is what has to be declared on Form E under question 2.2 and then goes into the pot to be split between Keith and his wife. The fact that Keith would be unlikely to get that much for his share if he was selling just one third of the house is not relevant in divorce. All that matters is how much Keith would get if the house was sold.