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Can The Inland Revenue Take Posession Of Ones House (A Home With Children) For Non Payment Of Income Tax
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Can anyone give me some advice? My daughter has two children aged 9 and 14 and lives in a house mortgaged to her partner. His name is the only name on the mortgage, but he has left the family home and is living elsewhere. He still pays the mortgage, but he is self employed and has a problem with income tax and may be hit with a large bill for unpaid tax. My question is- if my daughter's partner cant pay his tax arrears, (some five years worth) or come to some arrangement with the Inland revenue about a repayment schedule- can the revenue take the house in lieu of payment and make my daughter and the children homeless?
Is it realistic to say that if he agrees to her name being put on the mortgage as joint owner of the house, so that the property is jointly owned (would that be correct if its possible?)- then the Inland revenue could not claim the house as payment because she would co-own the property and also has two children... ? I am rather in the dark with this, any help would be most welcome. Thankyou.
Is it realistic to say that if he agrees to her name being put on the mortgage as joint owner of the house, so that the property is jointly owned (would that be correct if its possible?)- then the Inland revenue could not claim the house as payment because she would co-own the property and also has two children... ? I am rather in the dark with this, any help would be most welcome. Thankyou.
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Since I saw your question, I have held back so as not to cause your post to disappear off the unanswered list before someone very knowledgeable replies. Below are my thoughts but I am not an expert.
Sharing the debt would not provide your daughter with any added protection against eviction from her present home whereas sharing ownership almost certainly would - these two things are separate. Ownership, in a way, has nothing to do with a mortgage although usually only the owner would get a mortgage (partial or whole responsibility for repayment). Simply owing money on a property does not confer ownership, in fact the opposite because directly proportional to the outstanding amount (and through the signed security for the loan) ownership in a sense rests with the lender until the debt is paid. If a share of the ownership were transferred to your daughter then the mortgage issuer would have to be advised (the process more or less guarantees this) and that institution (bank or building society) might not agree and/or would attach conditions for the loan to continue, possibly including a completely new loan and terms.
If your daughter takes on a share of the mortgage without securing ownership to at least the proportional extent then she has the worst of everything: She would owe money on the property, not own any part of it and have no defence against the owner or his creditors (to whom he is in debt) if they (either/any of them) tell her to vacate it.
Any action resulting from debt owed by her (former) partner could impinge on your daughter where hers and his financial affairs overlap but if she owns a share of the property then, as a separate individual, she would retain that ownership regardless of the other owner losing his. If hers is a minority ownership then issues pertaining to the majority ownership could easily overrule her security of tenure, but not her partial ownership in itself. A sale of the property could then possibly be forced but your daughter should get her share of the net proceeds. As a minority owner in this scenario she would most likely have to vacate the property, possibly even as a majority owner but not as sole owner. The issue would likely be regarded as complicated and all procedures could be very long winded. None of this would however apply if she simply shared the debt (mortgage) because then she could be evicted with the minimum statutory notice and have no say at all if/when he is forced to sell by a creditor such as the taxman.
You are correct to fear the possibility that the taxman could ultimately seize the property in order to sell it against a debt owed them b y the owner (partial or sole), although this might take some time to bring about. The tax authorities are the most powerful authority in the land.
Hopefully someone properly knowledgeable will provide you with a more authoritative and comprehensive response.
Sharing the debt would not provide your daughter with any added protection against eviction from her present home whereas sharing ownership almost certainly would - these two things are separate. Ownership, in a way, has nothing to do with a mortgage although usually only the owner would get a mortgage (partial or whole responsibility for repayment). Simply owing money on a property does not confer ownership, in fact the opposite because directly proportional to the outstanding amount (and through the signed security for the loan) ownership in a sense rests with the lender until the debt is paid. If a share of the ownership were transferred to your daughter then the mortgage issuer would have to be advised (the process more or less guarantees this) and that institution (bank or building society) might not agree and/or would attach conditions for the loan to continue, possibly including a completely new loan and terms.
If your daughter takes on a share of the mortgage without securing ownership to at least the proportional extent then she has the worst of everything: She would owe money on the property, not own any part of it and have no defence against the owner or his creditors (to whom he is in debt) if they (either/any of them) tell her to vacate it.
Any action resulting from debt owed by her (former) partner could impinge on your daughter where hers and his financial affairs overlap but if she owns a share of the property then, as a separate individual, she would retain that ownership regardless of the other owner losing his. If hers is a minority ownership then issues pertaining to the majority ownership could easily overrule her security of tenure, but not her partial ownership in itself. A sale of the property could then possibly be forced but your daughter should get her share of the net proceeds. As a minority owner in this scenario she would most likely have to vacate the property, possibly even as a majority owner but not as sole owner. The issue would likely be regarded as complicated and all procedures could be very long winded. None of this would however apply if she simply shared the debt (mortgage) because then she could be evicted with the minimum statutory notice and have no say at all if/when he is forced to sell by a creditor such as the taxman.
You are correct to fear the possibility that the taxman could ultimately seize the property in order to sell it against a debt owed them b y the owner (partial or sole), although this might take some time to bring about. The tax authorities are the most powerful authority in the land.
Hopefully someone properly knowledgeable will provide you with a more authoritative and comprehensive response.
.
OK if he (Mr X) is on the mortgage it is extremely likely the house is in his sole name.
So the house is X's asset so if the I R wish to make him bankrupt for tax arrears then the house would be the main asset.
The big question is: does someone else's ( W's) equitable interest prevent forced sale of the house by the main creditor ? I would have thought the answer is no, actually.
Since the quarrel is between X and HMRC, would W have any way of varying the penalty - other than coming up with a big big cheque ?
[ if you owe £4000, there is no duty of HMRC to accept four one thousand pound cheques at yearly intervals - but they may do ]
Finally can X dispose or hide an asset when he knows HMRC is after him ? No : on application the judge will if he is persuaded by HMRC that it is to defraud HMRC make the requisite order unwinding the transaction.
[ obviously selling for market value would not be unwound but then of course they would want to know the fate of the money tendered. ]
Sorry.
OK if he (Mr X) is on the mortgage it is extremely likely the house is in his sole name.
So the house is X's asset so if the I R wish to make him bankrupt for tax arrears then the house would be the main asset.
The big question is: does someone else's ( W's) equitable interest prevent forced sale of the house by the main creditor ? I would have thought the answer is no, actually.
Since the quarrel is between X and HMRC, would W have any way of varying the penalty - other than coming up with a big big cheque ?
[ if you owe £4000, there is no duty of HMRC to accept four one thousand pound cheques at yearly intervals - but they may do ]
Finally can X dispose or hide an asset when he knows HMRC is after him ? No : on application the judge will if he is persuaded by HMRC that it is to defraud HMRC make the requisite order unwinding the transaction.
[ obviously selling for market value would not be unwound but then of course they would want to know the fate of the money tendered. ]
Sorry.
Excellent answers from Karl & PP.
As stated HMRC have tremendous powers to recover income tax & national insurance contributions, they can use the magistrates court for some tax debts who can act as debt collectors and decide to imprison the person owing tax & NI if they decide non-payment is due to wilful refusal or culpable neglect, imprisonment does not write off the debt and wilful refusal or culpable neglect are not defined by statue or regulation, but the persons conduct must be blameworthy in some way. As a defence evidence in the form of a financial statement should demonstrate to the court that it was impossible to pay tax & NI and the failure to pay was not culpable.
Placing part of the property in the name of your daughter may buy you some time (probably years) but ultimately she may have to move.
As stated HMRC have tremendous powers to recover income tax & national insurance contributions, they can use the magistrates court for some tax debts who can act as debt collectors and decide to imprison the person owing tax & NI if they decide non-payment is due to wilful refusal or culpable neglect, imprisonment does not write off the debt and wilful refusal or culpable neglect are not defined by statue or regulation, but the persons conduct must be blameworthy in some way. As a defence evidence in the form of a financial statement should demonstrate to the court that it was impossible to pay tax & NI and the failure to pay was not culpable.
Placing part of the property in the name of your daughter may buy you some time (probably years) but ultimately she may have to move.
The ex is paying the mortgage. You call him a partner so I assume they are not married. Your daughter's rights at present are really quite limited. The ex could decide to sell the house & she would probably have considerable difficulty preventing him doing so. If there is equity, he might try to do that to pay HMRC.
Certainly, HMRC can make him bankrupt & the house is then at risk.
Reading between the lines of your post, I suspect you are considering providing the money to pay HMRC provided that your daughter becomes a joint owner of the house. If you do that, her position is secure for the present, but it is not inconceivable (although unlikely) that the ex could later on try to get a Court Order for Sale. If you go ahead with this you must make sure it is properly tied up legally - ownership would probably be as tenants in common & the % your daughter owned would have to be stated on the deeds. If she then also went onto the mortgage (you would need to determine whether the lender would insist on that) she would become jontly & severally liable with the ex for the whole of the mortgage payment, so if he stopped paying the lender would chase her & could repossess.
Certainly, HMRC can make him bankrupt & the house is then at risk.
Reading between the lines of your post, I suspect you are considering providing the money to pay HMRC provided that your daughter becomes a joint owner of the house. If you do that, her position is secure for the present, but it is not inconceivable (although unlikely) that the ex could later on try to get a Court Order for Sale. If you go ahead with this you must make sure it is properly tied up legally - ownership would probably be as tenants in common & the % your daughter owned would have to be stated on the deeds. If she then also went onto the mortgage (you would need to determine whether the lender would insist on that) she would become jontly & severally liable with the ex for the whole of the mortgage payment, so if he stopped paying the lender would chase her & could repossess.
I was reading Nat Prov v Ainsworth (1965) in the bath - you know as you do and thought oh dear in 1952 the wife MAY have protection.....
so this site gives the law at present (2012) - it is a briefing paper for MPs as they go about their daily work and fiddle expenses for our money but set out the law as Fred says, and yes the Banruptcy man can evict the wife and kids.....
What will happen to the bankrupt's home? ( PDF, 6 ... - Parliament
www.parliament.uk/briefing-papers/SN05178.pdf
Jun 1, 2012 - (the 'trustee') has the right to force its sale is determined by the .... A bankruptcy restriction notice is an entry at the Land Registry against a property .... wife, only the bankrupt's interest in the property will automatically vest in ...
so this site gives the law at present (2012) - it is a briefing paper for MPs as they go about their daily work and fiddle expenses for our money but set out the law as Fred says, and yes the Banruptcy man can evict the wife and kids.....
What will happen to the bankrupt's home? ( PDF, 6 ... - Parliament
www.parliament.uk/briefing-papers/SN05178.pdf
Jun 1, 2012 - (the 'trustee') has the right to force its sale is determined by the .... A bankruptcy restriction notice is an entry at the Land Registry against a property .... wife, only the bankrupt's interest in the property will automatically vest in ...
reading in the bath again
Williams Glyn v Boland seems to be four square with this (answer No protection for the wife)
http://
Williams Glyn v Boland seems to be four square with this (answer No protection for the wife)
http://
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