Property Transfer - splitting equity

[kaiser78]

I cannot get to my mortgage broker until Monday so hopefully someone on here can help. As part of my divorce I want to take sole ownership of our second property currently mortgaged in mine and wifes name.

To keep numbers round the property is worth £200k, mortgage owed is £100k, as is therefore the equity.

We will split the equity 50/50, so can I therefore re-mortgage to £150k and pay the wife her £50k equity share out of this ?

[scooterscot]

Take the £50k and buy bitcoin.

[tarbera]

Property Transfer - splitting equity

Your wife and her lawyer have accepted this proposal and you have it in writing ?

Or are you just using man logic and 50% is fair? as wife lawyer will seethe £100K as £70K to wife and £30K for lawyer fees

[Bacchus]

I cannot get to my mortgage broker until Monday so hopefully someone on here can help. As part of my divorce I want to take sole ownership of our second property currently mortgaged in mine and wifes name.

To keep numbers round the property is worth £200k, mortgage owed is £100k, as is therefore the equity.

We will split the equity 50/50, so can I therefore re-mortgage to £150k and pay the wife her £50k equity share out of this ?

Almost to the letter what my ex-wife and I did.

The mediator was aghast at such a fair solution but it worked for us. The solicitor advised that there might be a stamp-duty implication as the deal also included her taking 100% ownership of the family house, but luckily the ex was also a solicitor (a better one...) and was able to point out that transactions between spouses aren't stampable and we would still be spouses at the time of the transaction.

[kaiser78]

Your wife and her lawyer have accepted this proposal and you have it in writing ?

Or are you just using man logic and 50% is fair? as wife lawyer will seethe £100K as £70K to wife and £30K for lawyer fees

Just using man logic here hence keeping numbers round and basing on best case equal split.

[kaiser78]

Almost to the letter what my ex-wife and I did.

The mediator was aghast at such a fair solution but it worked for us. The solicitor advised that there might be a stamp-duty implication as the deal also included her taking 100% ownership of the family house, but luckily the ex was also a solicitor (a better one...) and was able to point out that transactions between spouses aren't stampable and we would still be spouses at the time of the transaction.

Thanks.

Our mediator was pretty rubbish as he would not suggest a fair split amount other than kids requirements come first, which we kind of knew anyhow.

[ContrataxLtd]

Almost to the letter what my ex-wife and I did.

The mediator was aghast at such a fair solution but it worked for us. The solicitor advised that there might be a stamp-duty implication as the deal also included her taking 100% ownership of the family house, but luckily the ex was also a solicitor (a better one...) and was able to point out that transactions between spouses aren't stampable and we would still be spouses at the time of the transaction.

Just be careful here, when a mortgage is involved then there is deemed consideration on the transfer for stamp duty purposes and this can often lead to a stamp duty implication i.e. stamp duty payable.

There is legislation to avoid this where the transfer is made as part of a financial agreement between separating spouses or court orders etc. but I would definitely advise the OP to speak to his accountant about this, especially because the additional 3% surcharge would likely apply too if stamp duty was payable.

In the OP's case the Stamp Duty is probably avoidable but it depends where they are up to in agreeing settlements etc.

Martin
Contratax Ltd

[northernladuk]

Will your wife be OK with this? It's an investment bringing income in and costing nothing so surely she'll want the same deal for herself?

[kaiser78]

Will your wife be OK with this? It's an investment bringing income in and costing nothing so surely she'll want the same deal for herself?

She doesn't want any income from this - she has said it will be my hassle so I can have for myself.

I need to decide whether to proceed as a BTL, or just sell given the tightening of rules around BTL.

[northernladuk]

Ah. Result then. BTLs still good in the long run IMO.