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Topic:
clean break/buy to let (8 Posts)
Started By:
Date:
20 August, 2017 05:25PM
clean break/buy to let
acsrjsk - 20 August, 2017 05:25PM
hi

I am thinking about proposing to ex solicitor about switching the FMH mortgae terms to buy to let instead of having this to be sold.
I have not thought about the percentage yet. We don't have children and both employed with reasonable income at present.

I understand that housing needs to be taken priority but obviously both parties will need to decide (i.e, ex) if buy to let is sometihng that is of interest. There is a big equity that has been built up on the property and consider the area we live it will only go up in future, so it would be a shame to have this to to sold.

I was wondering if anybody else has done this or any advise that you can give me?

Thank you
Re: clean break/buy to let
Andyk - 20 August, 2017 05:49PM
You will still be financially tied to each other. Can't say I would be happy with that but I guess if your ex isn't bothered about cash now and happy to be in it for the long term give it a go.
Re: clean break/buy to let
acsrjsk - 20 August, 2017 07:40PM
Thanks Andyk.

I have sent a without prejudice comms to the other side asking if provisionally they will be happy with this sort of approach before going into the details.

When you say financially tied to each other - I don't fully understand this. If the consent order says that each party cannot claim on any thing else apart from the share that will be agreed on FMH then that is the only tie right?
Re: clean break/buy to let
Andyk - 20 August, 2017 08:41PM
You will still own a property together so you have a financial tie, could be messy if one of you want some to sell and the other doesn't.
Re: clean break/buy to let
acsrjsk - 20 August, 2017 08:59PM
Ok thanks. obviously I need to figure out for my proposal on how this could work in reality:

I was thinking along the lines of:

1. Every two years parties decides if the property is to be sold and if even one says yes then automatically it has to be sold.
2. Estate agent emails the summary of rental income to both parties on monthly basis.
3. Both parties takes equal risks in terms of maintenance - for example, if there needs to be repairs, not having rental income then both party should cover this.
4. Failure on either party not covering the maintenance or rental fee and left to one(probably me!) etc then when the property is to be sold (in the coming 2 yearly review) then the defaulting party share would have their part of the money deducted from their share.

Will the above work? are there any other considerations? I would like to know if anybody has done this sort of thing in their divorces or any advise you can give me.



Edited 1 time(s). Last edit at 20/08/2017 09:00PM by acsrjsk.
Re: clean break/buy to let
HatMan - 21 August, 2017 06:48AM
Well...the obvious thing to consider is Capital Gains Tax, you will both be acquiring liability on the assumption that other property is bought to live in, ergo that might be a consideration for either or both of you, personally I think that what you are proposing is a lot more trouble that it's worth - you are going your separate ways and it would be a damn sight easier for everyone of you get everything tidied up now - neither of you know what the financial position of the other party will be in years to come and leaving this as an open subject , even with the conditions you propose, is a nightmare waiting to happen...in my opinion!
Re: clean break/buy to let
davidterry - 21 August, 2017 10:00AM
>> it would be a shame to have this to to sold.

There are very few people who would want to be tied to the former spouse in this way. And it creates ongoing capital gains tax and income tax issues. Whether you want this or not I would be very surprised if it is what your spouse wants. This type of arrangement is rare for good reasons.



Edited 1 time(s). Last edit at 21/08/2017 02:45PM by davidterry.
Re: clean break/buy to let
Andyk - 21 August, 2017 11:27AM
Take your share of the equity and use that on your own Buy to Let, then you only have yourself to answer to and the profit (and tax liability) stay with you.
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