Putting "my" house into both names - what should I know?

[apartridgeinapeartree]

DP, our DCs and I are moving. I have owned the London flat we currently live in for a long time, and have seen the price more than double.

We're moving out of London, and buying a house with the proceeds of the flat, so we'll be living mortgage free.

I want to put DP's name on the new property too. I want to do this as we're not married - (planning to do so but not for some years), and I want him to have the security of his name on the house. I also want him to feel it's his house too.

(I feel I have sound reasons for wanting to do this, which I won't go into right now.)

Putting aside all the "don't do it" arguments (which won't change my mind, honest!) I just wondered if there is anything I need to know from a financial / legal point of view?

If we add his name to the deeds, will we get a surprise tax bill perhaps (capital gains?). We're using a conveyancer who turns out to be pretty useless, and I'm not getting the level of advice I'd like, so I though I'd ask the wisdom of mumsnet!

Does anyone know if we can just do this or is there legal / financial stuff we should be aware of?

Hopeful bump?

Sorry no advice other than get a new conveyancer! Oh and make sure you have a will as you're not married.

Thanks for the reply Pootles :)

It's a bit late to get a new conveyancer, we're hoping to exchange very soon. Lesson learnt for next time though! The problem with them is you never get to speak to the actual solicitor, and the level of advice the conveyancers give isn't very technical (well, in that firm at least).

Yes, a will is on the to-do list, thanks for the reminder! :)

www.firstrungnow.com/joint-ownership/joint-tenancy-tenants-in-common.aspx

You can either be:
Tenants in common - each own a percentage of home
Joint tenants - 50/50

Each of these will have consequences with regards to marriage/divorce and death i.e. what happens to the other partner and children, especially when considering remarriage/inheritance.

A good solicitor should walk you through these options. Think about these things now and it will be easier. It's not cold or calculating - it protecting both your children and each adult. If you're not getting advice from this conveyancer then think about booking time with another solicitor. They will explain any benefits or consequences of decisions.

Please also do a will - this can be tied into a tenants in common package, in the case of death. The surviving partner can remain in the house till death, no forced sale, if for example you decide on a 50/50 split.

You need to know that if you need to sell the property for any reason for 6 years (or one of you dies), you (he) will be liable for capital gains tax on the 50% you gave to him.

I can see why you as a couple may like to do this but it isn't hugely practical as you need to stay in that new property for at least 6 years to save the capital
Gains tax bill.

As other said, decision on Joint Tenants/Tenants in Common and a will.

If you are absolutely certain you will not need to sell for 6 years then I don't see any reason not to.

Just one issue, if you and your DP spilt up, he will be able to force a sale or you to buy him out immediately. Unlike a divorce where you would either have to come to an agreement or get court orders as part of a settlement which would take your situation and DC into account, this isn't the case here. If you gift him half your property by signing it over to him, he can force as sale if you split up without any reference to any part of your life or other process to protect you.

Personally I think you are mad for doing this. You have little enough protection if your relationship breaks down. Your flat is the only bit of financial security you have.

What did he bring to the relationship in terms of money?

I would not do this as if you split he can force a sale and waltz off with your cash. He might not want to now, but who knows? Plus if he should ( heaven forbid) die, his next of kin, which isn't you as you are not married gets half of or property, and again, can force a sale. If you die, he gets it all.

Plus of course, you may decide you don't want to marry him and then he will have half your property and may not want to sell or leave.

Why don't you wait to get married then sign half over? Having half a property won't make someone feel better or stay in the long run. It's very risky.

If you are paying half the mortgage each, either he pays into your account and if anything happens you can decide if it's rent- whereupon he should, sign a rent book, or contributing, so you pay him back plus interest.

As a final:) is all the money used for your original flat yours, or did or parents give you a deposit or anything? Because it coud cause friction that you are nt married yet he is a benefiary of your good fortune.

Thanks for the advice I knew the wisdom of mumsnet would know!

IvanaHumpalotCountDracula and skandi1 that's interesting about capital gains tax, very useful info. It's very possible we might want to move before 6 years.

Lavenderhoney good point. Yes, my dad did lend me £11K to buy out the freehold. He said to pay it back when we move on from this house. There is no mortgage, we will own it outright.

I hadn't thought about the next of kin in event of death, that's a good point also. Although that could be solved with a will, couldn't it?

MoreBeta I wasn't going to get into this, but (against my better judgement!), here goes ...

DP supports us currently. He left a well-paid career which he loved and had spent years building up to be with me and DS when I got pregnant by accident (his job meant he'd be away for months at a time, not the kind of family life either of us wanted). He's currently retraining in a new career more suitable for family life and I have no doubt he'll do very well indeed. He's clever, immensely capable and a grafter.

What I want to achieve by this is for DP to have a sense of security, for him to feel that our home is his home. There's a lot of work to do on the house: he will be doing it. By moving country and leaving his career to be with me and our DCs he's given up a lot, financially, which he has never mentioned but I'm aware of. It was my idea to put his name on the deeds, not his. It's a big gesture, but one I want to make. We are sharing our lives together. However I don't want to put us in a position where we're liable for large amounts of tax.

Perhaps getting married sooner instead would be worth thinking about.

I did ideally want a big wedding (as in able to cater for lots of friends - not bothered about spending a fortune on dress etc!) when we could afford it though, not just something very small and simple which is all we could afford right now. (We're asset rich but cash poor at the moment!)

Or perhaps it would work to give him just a token percentage of the property so his name is on the deeds, but we avoid paying CTG. Is there a level at which CTG kicks in I wonder?

Ideas on how alternative ways to do this are welcome.

Warning me off doing it coz he might run off with it is going to fall on deaf ears I'm afraid! But stuff about CTG and next of kin inheriting etc is definitely something to think seriously about. Very useful advice, thanks :)

why not go to the registry office for the bit of paper now and have the lavish party and lovely dress later?

all sorted

I like your thinking MousyMouse ... but I reckon if we do the registry office now we'll never get round to the lavish party. And wouldn't a party 3 years later feel a bit false?

And anyway DP's mum would never forgive us if we got married without her there! And then if she's there, we'd have to invite my parents too. And our sisters. And our best friends. And ... and then it's a wedding. But not the one we want.

Am I being vain with wanting a big wedding?!

Hmm ... maybe we should consider a small wedding now and a big 5 year anniversary party.

Still, not really the same as a wedding with all your friends and family there is it?

The wedding isnt the important bit, and there is a lot more financial security in marriage, I would go so far as to say, given the level of commitment you are showing to each other, a marriage is more important than house deeds.

Don't know where skandi got her information but think she is a bit confused about how capital gains tax works.

Look up private residence relief.
www.hmrc.gov.uk/cgt/property/sell-own-home.htm

How about a cohabitation agreement? Or a will allowing him to part or all of the house to live in until he dies and then to dcs.

apartridge - getting married changes everything. Unmarried women have far less protection than married women.

However, it strikes me that getting married and sharing your home is definitley the right thing to do. If that is the level of commitment you and he feel then I say definitley go for it.

Good luck.

I'd get married, you don't need to tell anyone, treat this just as a bit of paper then in a couple of years you can do it again with either a church wedding or a humanist ceremony.

Capital gains tax only applies on properties that are not our principal dwellinghouse. So unless you own and currently live in another property, CGT will not apply.

Ivana is correct in that you can hold the new property as Joint Tenants or as Tenants in Common in unequal shares. You could also consider holding the property in your sole name but make a Will stating that the property is to be held in Trust for your DCs but that your DP has the right to reside in it during his lifetime.

Definitely insist on speaking to a Solicitor as this needs to be agreed prior to completion as the clause relating to how the property shall be held is within the Transfer Deed which the Seller (and probably you) will sign to effect the transfer of the property.

I know the marriage thing makes sense on paper. But I'm a romantic. It feels like a let down to get married in such a utilitarian way.

I expect I'm being silly about this! But honestly, it's that which makes me hesitate.

You could do a wedding now with all friends and family - it's not compulsory to waste spend thousands on it.

Yes Skand1 was confused about the tax situation.

The 7 years thing only matters if you (not him) die within 7 years of giving half the house to him. As it stands now it is a Potentially Exempt Transfer (PET) for inheritance tax purposes, if you live 7 years then no tax due, if you die within that then inheritance tax is due on a sliding scale. This is just to stop people giving everything away just before they die to save inheritance tax. It does not matter at all whether you move in that time period or not so don't worry about that.

For capital gains tax, as long as it is your 'principal private residence' then there is no tax to pay.

Hope that helps.

Yes, and it does make a difference if you are joint tenants or tenants in common. With joint tenants you both jointly own the whole thing, if one of you dies the other one automatically owns the whole thing. The house then does not form part of your estate for inheritance tax purposes.

With tenants in common you each own 50% (or whatever percentage you decide). If one of you dies they can give their half to anyone they want. It will form part of heir estate for inheritance tax. If it is passed to a spouse there is no inheritance tax due but depending on the size of it, there potentially could be tax due if it was passed to someone other than a legal spouse.

If you do give it away also make sure both he and you have a Will that gives the other person the half of the property they dont own.

There is an uncomplicated way to protect the money you have put into the house while also putting your DP's name on the title.

You take ownership as tenants in common(rather than joint tenants). You then get your solicitor (I would strongly recommend using a qualified solicitor rather than a "conveyancer") to draw up a deed setting out the proportions in which your and DP beneficially own the property (beneficial and legal ownership are different things). If this is not done then the presumption is that you own it 50/50. With a deed you could, for instance, agree that you own 74% and he owns 26%, or whatever proportions you feel fairly reflect your respective investments.

With a tenancy in common, each of you can leave your share in the property to whomever you like in your will. If, on the other hand, you own as joint tenants then on the death of one of you, the whole property has to pass to the survivor. This is the case even if the first to die has a will saying that their half goes to their child (or whoever).

Thanks everyone, this is really useful.

Bilbobagginstummy, the wedding we want isn't ridiculously extravagant. (I've seen dresses I like for around £200 for example), and we're not traditionalists at all, we can do away with a lot of the standard wedding stuff, so our wedding won't cost nearly as much as some I imagine.

However if we want our friends and family there, that's where the cost comes - it costs money to put on an event with lots of people.

For me, weddings are not just about the couple. They're also about the bringing together of two families and groups of friends. We're atheist, and our friends and family are spread out, so have other than weddings we no other chances for extended family to get together - well, except funerals - and certainly none which include our friends too. For me, the idea of gathering all our family and friends together to witness our union, spend time with each other and for many, to meet each other for the first time - is really important. I would be sad to not do this.

We have very little money at the moment while DP is retraining and I am off work (asset rich, cash poor!) and would find it hard to pay for a birthday party let alone a wedding!

Also we have no time. DP works in the day, studies in the evenings. We're finding it hard to keep up with normal social stuff like meeting friends for Sunday lunch. Even if we had the money, there's no time for making wedding plans atm!

If we were to get married for the paper, it would be exactly that. Go to registry office, get married. Go to the pub! No reception/party, no nice new frock for me / outfit for DP. No honeymoon. No kids running round having fun at a reception, or friends and family we care about celebrating our marriage and meeting each other.

I guess we could do this like others have suggested later - but I worry that if we get married now, the big party will never happen, or it'll feel false when it does.

Thanks for the comment, it's helping me work out what's important!