"Our" house, not our mortgage/deeds - now want to move on...

What do you mean "means"? Are dad and sis just nominee owners, it having been intended at the time of purchase that it should be for gf and son?

Was it a 100% mortgage or was a substantial deposit involved, and if so who paid it and was it considered a gift or an interest free loan or was it deemed to mark an ownership stake?

And why was it done this way? Was it a scam to qualify for means-tested aid?

That suggests it was not bought for gf and son but for gf/son and sis.

This confuses the question of who thinks they own it. Is there a consensus about what shares of the ownership each of you hold?

Move on as opposed to move out?

Ah, not move out and sell up, then, at least not yet.

Beneficial ownership isn't something you apply for. It's something you decide. Who first owned it when it was bought? Was it a gift from dad to gf and sis? If all four of you are agreed that you and gf are now the real owners, it might be necessary also to agree at what time sis's share passed to you. There may be stamp duty implications. There should be no CGT implications if dad's share passed at the outset and sis's share passed when she moved out.

Despite the fact that you and gf have been paying the mortgage, as far as the lender is concerned the mortgagors are dad and sis, so if you want to carry on, you will need to get the deeds changed, and you will need to apply afresh for a mortgage.

If you do this, might it not be even better to agree that really it was already gifted (say from dad to the two sisters in equal shares at the outset 5 years ago, and from sis to you when she moved out and you in 4 years ago)? Then there would only be 2 years waiting time left.

You can only sensibly calculate CGT if you can establish, for the entire period since purchase, who owned what shares of it. If dad gifted it at the outset, there can be no CGT on him since he never owned it (except on paper). If sis owned half for one year and then (is presumed to have) gifted it to you, there's again no CGT issue. If sis only now gifts her share to you, then she might be stung for one year's worth of CGT unless it can be engineered that the mortgage you paid was really "rent". In any case, if her stake was 50% and she got clobbered for a fifth of the her half of the gain, this would only be £7k worth of taxable gain which is below the annual exempt amount, so no issue unless she's made other capital gains in the same tax year.

That leaves dad's stake, but if it was always deemed to be really gf's and not his, then there's no issue, otherwise he'd be looking at a £35k gain to be taxed, with not too many reductions available.

There is that possibility, if the gifts are considered to have been made now (after the gains were incurred) rather than earlier (before they were). What you need to do is analyse what went on in the minds of the parties involved right from the outset. If it was all a bit vague, there is scoe for disagreement now, but if there is agreement now, you can probably document now almost anything you like about what went on 4 or 5 years ago, so if necessary you could construct a tax minimising scenario establishing that beneficial ownership passed at a time before any capital gains had accrued, and also that the 7 year clock has already been running for 4 or 5 years.

Incidentally, even if the dad or sis were to die before the 7 years are up, there is still no guarantee you'd be called upon to contribute to any IHT due. This would depend on what other gifts they had made in the 7 years prior to death, and how big the rest of their estate is.

At the time, my gf was working a crappy wage in a crappy flat with her baby son. No savings, just debt - so her dad and sis got a house and mortgage (due to credit rating) so the three (gf, son, sis) could live together - the intention that the

Errr, never thought it sounded "scammy", just the fact gf (probably) seen as a bad risk in credit terms at that time. A deposit is involved : I think about 3k (maybe 5k) was paid by sis and dad.

Correct.

Dad never owned it - it was a home for his kids and grandson. A gift (you could say, after reading what you say later on...)

Sister has own life, mortgage etc with her boyfriend. Has no interest in the place now she has vacated.

You got it!!

...with a slight "catch". We would like to give them back their deposits. (They haven't "demanded" them back - btw)

This wouldn't be something they would put in writing as in if you move on we MUST get our money back and we sign up to that. They have loaned it with no terms. We just want to do the right thing: pay them back - it's only fair for getting us on the ladder.

I appreciate that this may potentially get tricky - as the original intention was probably that sis paid her deposit, and was going to stay there - BUT THEN decided to move out, she now would like her money back and we could potentially argue that...

All in all - we are a friendly bunch(!) and we wouldn't argue that. Her sis has been very kind and generous in other ways, especially with son and all - so it's a bit of a thank you.

We really appreciate this advice!!!

Thanks.

Just to clarify for your question:

Nope - all "gifts". Dad and sis just wanted to help out as much as poss. Give us a nice comfortable place for their grandson/nephew to grow up in.

It was never a conditional - "I pay for the drive, now you OWE me s!"

We just want to pay back the deposit of 3k each plus an extra 2k each (that's 5k each, to clarify) just to be fair and say thank you.

I guess the whole matter comes down to - the house needs to be sold to release the equity, we want the equity (minus 10k for dad and sis) to be put down on the next place.

(The reason I went into who paid for what was incase the thread got onto CGT and it could be put down as improvement costs)

Thanks again