Shared ownership of a property

[samarrange]

DW and I are around 60 and although we are British we haven't lived in the UK since 1980, so we have no idea how "adulting" works there. DD (28) is living in the UK with her boyfriend (29), and they are currently renting.

We have some money in the bank of Mum and Dad and would like to help DD to buy a property. Where they are, the kind of property they would want is around £350K, and we can chip in around £150K.

DD makes twice the salary of BF and this is likely to continue, even if grandkids come along. BF is great and they have been together for 5 years, but they aren't married and if push came to shove we would want our assets protected. So we are probably looking for some kind of joint ownership, so that our money is clearly separate from DD&BF's, whatever their relationship formalities.

In some European countries there is the concept of a "one-asset company", where you create a partnership whose only asset is the house and then assign shares in that. For example we might have 35% of the property, DD would have 50.001%, and if BF wanted to chip in for 15% he would be welcome. Then if they moved or the relationship went south, he could be bought out.

Does anything like this exist in the UK? What other possibilities are there?

Where in the UK?

Scotland?
England/Wales?

I'm not a lawyer but hope one comes along soon.
In any case your dd will need a solicitor when she's buying anyway (at least in Scotland).

I think ...
You can either be joint tenants or tenants in common.
Joint tenants own jointly.
Each owns 100%.
AFAIK
Tenants in common could maybe own a different % each.

You can do something along these lines. A trust might also be an option?

You might want to post in Legal matters and/or speak to a solicitor in the relevant country.

Should have said: This will be in England.

You might want to post in Legal matters
Thanks. I'm new, didn't see that section.

My partner and I are tenants in common. My share of the deposit was more, but we split the mortgage payments equally so we worked out our percentages by: (Individual Deposit Amount + Half of Borrowed Amount) / Total Price of the House.

I was in a similar situation when I bought a flat with my boyfriend (now husband). I paid 95% of the deposit but we paid the mortgage 50/50. My DF suggested we get what's called a 'Declaration of Trust' drawn up by the lawyer managing the purchase to ensure that if anything happened and we broke up that I would get my relative share back when when the property was sold (taking into account the increased value of the property). It cost about £350 but basically outlined how the money was divided. I can't remember much more detail than that but I would do some research on a Declaration of Trust and speak with the property lawyers you are using as they surely deal with uneven splits of money in house purchases every day.

Tenants in common is what you want. You can specify the percentage each party owns.

Thanks everyone! Seems like no limited company is needed. :-)

You can do tenants in common but it may expose you to a capital gain depending on Uk and your place of residence tax situation. It matters as if you ever want to give your share to DD it may bring about a capital gain unless done in death.

You could look at a cohabitation agreement which lays out and supports ownership. That however would be in the bin if they married and then they would need a pre nup. However, many couples don't feel comfortable with them and judges can ignore them emus a need.

You could look at it being an interest free loan with a charge in the property but some lenders may object.

I would suggest that you look at a trust arrangement which means it would protect the investment including in the event of marriage and divorce. However, you would need advice and a specialist able to set them up. Be careful to avoid run of the mill solicitors etc as you need someone who is specialist and experienced in the field. I know of Tilneys which are a national company with specialist depts (I dint work for them) but there are others. Having a trust means you could add to it in the future.

I do urge you to consider getting good advice and consider it.I have seen a couple of friends/acquaintances give money to their sons to invest in houses and on divorce the wives n both cases have walked away with the entire house and the money they gave as it became a marital asset,and part of the divorce settlement. With the right advice you can protect your daughter jn the future and now is time to do it when she will just welcome the money!

We bought a property with my FiL. Our solicitor did us a declaration of trust which specified who owned what. It's legally binding and when we sold after his death we were each paid according to the declaration.

I have seen a couple of friends/acquaintances give money
to their sons to invest in houses and on divorce the wives
n both cases have walked away with the entire house
and the money they gave as it became a marital asset,
and part of the divorce settlement.
This is exactly what we're trying to avoid. We don't personally know anyone this has happened to, but we have seen enough stories to make us very careful. Thanks for the detailed tips!

@samarrange I have and they bitterly regret it. The divorce laws in the U.K. can be perverse although it is swinging back slightly so some assets can be excluded if received ore marriage but judges can always overrule.

The safest route is a trust route. I'm not an expert on it by any means but I have a friend who is and it is a very effective way of giving money but ring fencing it away from a spouse in divorce. Solicitors will threaten to challenge it but they are very difficult to unpick if set up properly. My friends/acquaintance gave away over £300k and I thought it was outrageous what happened as one spouse was an utter gold digger and really hit the prize after getting divorced.

The only satisfaction is that the ex spouses both admit they will never get married again unless the new partners bring far more assets as otherwise they risk getting stripped!!