Tenancy in Common

[Kelly Jo]

Thanks you so much Didwot!  Just to confirm so I am 100% sure when/if we sell the property I would take a share of 71% i.e. (�132K/�185) and my partner would take 29% (�53K/�185K) Less any mortgage etc.  Sorry to pester but I want to make sure I know exactly where I stand and that I am being fair.

[Didwot]

Provided that upon a sale the amount required to repay the mortgage is divided in half, and one half deducted from his shae and one half from your share then the result is perfectly fair. If hte property were to be sold tomorrow you and he should get back exactly what you have put in, but if it sold later on when it has gone up (or down) in value, and some of the mortgage been repaid you will nedd to get a fair share each
For example if the property were to be sold for 200,000 after payment of legal and estate agents costs, and at the time the mortgage was to be 80000 you should receive 71% of 200,000 minus 40000 ie 142,000 minus 40000 = 102000, and he should recieve 29% of 200000 minus 40000 = 18000.
It will need to be spelled out very clearly.

[zmudge]

Just to recap upon all of your questions, deeds have been done away with and it is only how you are Registered on the Land Registry computer which counts now. You can see your entry by clicking here and following the instructions. Therefore changing from sole proprietor as you are at the moment to a member of a TIC necessitates altering the Register. On the form by which this is done you will tick TIC and then against this write the percentages in which the TIC is held (I will post this in a couple of parts due to the limitations of AB).

[zmudge]

If you are going to use the �8000 to pay off part of the mortgage and then pay the remainder 50/50 with the b/f your entry would be something like;

Of the first 53% KJ 48.67% and B/F 4.33% and of the remainder KJ 50% and BF 50% ( I have rounded your share up a little to save a lot of decimal points)

If you are going to put the �8000 to other use and then share as above your entry would be something like;

Of the first 48.64% KJ 44.31% and BF 4.33% and of the remainder KJ 50% and BF 50%.

However, if B/F has only a total of �8000 then after his share of the expenses and, possibly, Stamp Duty, he will have a lot less than �8000 to actually invest.

[zmudge]

Regarding Stamp Duty, this is paid by the purchaser, in your case your b/f. With your current valuation of �185000 potentially �35000 falls for Stamp Duty. To ascertain whether the Revenue will take the view that this tax must be paid by your b/f on his purchase of a share in the TIC, and, if so, the amount, telephone [phone] and explain the situation fully. Be sure to tell them of every detail so that they don't turn up a year or two from now with a large bill and a different view of the proceedings. If the answer is yes ask for the necessary form, and if it is no ask for the form to make a SDLT Nil Declaration which will be required by the Land Registry.

[zmudge]

I meant also to include that the Land Registry form changing you from sole proprietor to a TIC member has to be signed by you and b/f "as a deed". This creates the contract between you and b/f, and nothing else is necessary in disposing yourself of your property in the way that you wish. However, there is the problem of shared future mortgage payments, council tax, utility bills, repairs, maintainance and improvements, insurance, furniture, etc. the division of which it might be beneficial to set out in a separate document.