Repaying a loan when self employed

[FlamingoFlower]

I am currently full time employed (PAYE) and I also run a little side business and have registered self employed.

Partner is self employed also.

A parcel of land has popped up for sale that we would really like to buy together - we would be paying 2k each from our savings and a loan for the remainder.

The loan would be in my name as my credit record is better and also we don't have joint accounts so the plan was that he would deposit the 2k from his savings (cash) into my account and then each month pay half of the loan repayment.

This all sounds fine in theory but the problem is as I am self employed im concerned that this 2k cash and also the half of the loan repayments that he would be putting into my account each month is going to throw up red flags to HRMC.

Even though we haven't done anything wrong, we have both earned the money and paid tax on it, its still going to look dodgy isn't it?

I have only registered self employed 6 months ago so haven't even done my first tax return yet so this is all very new to me!

Get the whole thing confirmed in a written agreement signed by you both, to confirm it's being bought jointly with the loan in your name only for practical reasons, to confirm your OH legally owns half and legally owes you his share of the loan. That way you have the "evidence" in case HMRC raise an enquiry. You'll also have chapter and verse and proof of beneficial ownership for the eventual capital gains tax when you come to sell it and also to protect yourselves in case you separate. All the more important with you not being married. Better done by a solicitor so that you know it's legally binding. You wouldn't want to be left with him "owning" half of it but you oweing all the money on the loan would you - that's the legal position if you don't have some kind of written agreement to the contrary.

Thanks for that kazzy. Yes we are going to see a solicitor anyway as when we buy it the land registry will need updating in both our names so we want to make sure its all done correctly so will ask them to draw up an agreement at the same time. Just wasn't sure about the HMRC implications but if the document is enough evidence for that then that's put my mind at rest thanks!