Add wife to house ownership

Ask a law firm the likely cost of this. There might be taxation pitfalls which a lawyer will know how to deal with and the mortgagee (lender) would most probably want a lawyer involved anyway.

The lawyer may need to know your and your wife's respective contributions to the purchase to help work out the best way of arranging things. The lawyer may wish to advise you and your wife separately on the implications of the proposed transaction to help avoid any claims of 'undue influence' later.

You'll spend the rest of your life regretting it?

In message , abracad snipped-for-privacy@yahoo.com writes

First step is to approach your mortgagee, because if you want to maintain a normal domestic mortgage rate she will need to become a party to the loan as well. The mortgagee's costs are up to them, they will do a full mortgage appraisal on her, but bear in mind they may not accept her. Legal costs will include the mortgagee's legal costs and should be about £200-£300 max.

Is this likely to be a problem if the mortgagee then effectively has two guarantors to the loan instead of one? The mortgagee improves his or her position which ever way one looks at it since it can 'go' either party for the whole outstanding amount. The mortgagee's only concern would be that its position is not potentially undermined by future claims of 'undue influence' etc, but its interests in this regard would be easily respected.

Why, she has an undeniable beneficial interest in the house in any case, simply adding her name to the mortgage will not improve her position

The mortgagee's only concern

the doctrine of UI would only be relevant if further money is borrowed in addition to the existing mortgage within the same transaction

I believe that if you want to arrange your will such that you are 'tenants in common' then it is necessary that you are both registered as owners of the property. I looked into doing this a couple of years ago but dropped it when I found out I'd have to pay nearly a grand in stamp duty for the privilege. (Can't remember the detail but I believe it's treated as if your partner is buying half the property from you so has to pay stamp duty even though no money changes hands). If the amount of the outstanding mortgage is below the stamp duty threshold then you're ok, so I plan look into it again in a couple of years.

Why would a husband and wife wish to become "tenants in common" as opposed to "joint tenants", this normally only happens in seperation proceedings.

Correct, but it is calculated differently to normal SD

I don't remember the detail, it's something to do with the children retaining the right to a share in the house if one parent dies, the other remarries, and then other parent of the children dies, leaving the house in the posession of a step-parent who is under no obligation to leave the estate to the children.

I see, makes sense

But even to be joint tenants you would need both to be registered owners, wouldn't you? Implied marital rights would be limited to those of a tenant (i.e. right to occupy), not those of an owner. I.e. if the sole owner marries and then dies, without having put the property in joint names, the wife would not necessarily acquire sole ownership of the house, though might under intestacy rules and/or other legal rights acquire *some* interest, but it would depend on whether there is a will and what it says, and on whether there are children.

Isn't it that she would be treated as assuming "half" the responsibility for repaying the loan, and therefore, for SD purposes, the relevant consideration would be deemed to be *half* the outstanding loan?

In message , Willy writes

In conjunction with a properly worded will which creates a trust and an IOU, it is very easy way of avoiding a wodge of Inheritance Tax.

Not so, with the value of so many houses now exceeding the Threshold for Inheritance Tax it is becoming more and more common, more common that for divorces I would say.

No, it isnt primarily to do with the children retaining an interest in the house at all. It is just to use up the first to die's IHT threshold.

not in all circumstances, it could be held on trust

yes minus any purchase contribution

In message , peterwn writes

?? Who mentioned guarantors? I dont see any need for guarantors.

But the new mortgagor could have other debts that make them bankrupt or fall into debt and creditors may place a charging order on the house, etc., etc., or they may already be bankrupt.

No it isnt 'the mortgagee's only concern' at all. Every domestic mortgagee in the country will make some assessment on the new mortgagor although they are unlikely to take any notice of the level of income unless more money is being borrowed.

'Undue Influence' usually only comes into it when new money is being lent for the benefit of only one of the borrowers. In this case she is becoming a joint tenant and is benefiting from now owning all of a house.

Crap. It's about my children inheriting the house in the event of my death. Any tax considerations come a very poor second place to that.

OK, have it your way. Dont forget they will only have half the house (which will have to held in trust if they under 18) and could prevent your surviving spouse from selling it to move to a (say) a retirement flat, your wife could have to pay POTA and as she will have an interest in possession will be taxed for IHT as though it was hers possibly forcing the house to be sold. Children dont generally want a particular house, they want and need cash.

My way gives them the cash equivalent of the house value and enables your wife to live in it hassle free, yours doesnt.

My way saves up to £114,000 tax which your kids will, in effect, have to pay with your way from the estate possibly causing them to have to sell the house.

Doesn't that mean SD can be avoided? All that would be necessary would be for the husband to "lend" the wife enough money to enable her to contribute enough to the purchase to match half the outstanding loan. Since the money would be coming right back to the husband, the "money" need not actually exist (or in theory it could be borrowed from a third party for a day).

I do not follow your logic, if the transaction is merely a transfer of equity then no money changes hand

SD could be avoided this way if the market value was low enough yes, but these only occur in very few places in the UK