joint ownership and negative equity

[ayman]

This is indeed a very complicated and difficult situation I have found myself in.
In 2005 my ex-partner and I purchased 2 properties, however I did not want to purchase any, and to a point of trust and bullying I eventually signed. We bought a property from his mother which was put in joint names, however, as the other one was bought too, I told him I wanted my name off. He said no problem, however I stupidly forgot about it. We moved into the other property which was put into my name, as i was a first time buyer, and therefore no stamp duty was paid. I have to say I was extremely naive, stupid and trusting at the time.
Needless to say we separated in 2007 and I stayed in the property till 1/10/2009 when it was rented out.
Referrring back to the property in the first paragraph, I began to see sense as I wanted my name off. I had paid nothing into it, and do not want anything out of it. I did not (and still dont) know any detalis, tenants, rent, etc. I also found out that I had signed a remortage for 38, 000 in 2006 which went on another of his properties. At the time, I thought I was signing for a change of mortgage lenders. We had gone to his solicitor, and nothing was explained to me. I cannot get my name off as he does not have the funds, so myself and him signed an Indemnity form through my solicitor, stating that I should not be liable for any costs etc.
I have now declared the other property for tax,and said that he should be liable for the other half as its joint mortgage, but as I know no details of the other property did not put that one down. I doubt he is paying tax on
any of his properties.
Will I be liable for tax on the other property, it comes out of his account?

 

[Brendan Burgess]

You are right. This is very complicated. You will need to clarify. Leave aside the fact that you did not want to buy them for the moment.

Property 1 Mother's ex house
Purchased in 2005. Joint mortgage. Jointly owned.
Additional mortgage in 2006. (Funds used on Property 3?)
He agreed to take your name off this.
It's rented out?

How much is this house worth?
How much is the total mortgage on it?

Are you liable for tax on any rental profit?
There will only be a tax liability if it's making a profit. If it's not making a profit, there won't be a tax liability.
If it's making a profit, but you are not getting it, then you could certainly argue that you have earned nothing, so you have no liability.

But the bigger issue here is what happens if he can't pay the mortgage? You will be jointly and severally liable for any deficit.

You should "sell" your share of the property to him as soon as possible. He may have to pay stamp duty on the purchase of your half.

Property 2 "Your own house"
The house is in your sole name?
The mortgage is in your joint names?

You will only pay income tax on the rental income if you make a rental profit. Therefore, if he has to share in the tax, he should share in the profit. But this seems to be your home exclusively, so I don't think he has any right to the income or any liability for the tax.

Stamp duty exemption on Property 2?
I don't think that you were entitled to stamp duty exemption on this house.
You agree that you purchased it jointly. As one of you is not a first time buyer, you should not have got that exemption.
If you argue that it is your house alone, then why is his name on the mortgage? I thought that having his name on the mortgage, would mean that Revenue would regard it as not qualifying for FTB status. Check this out.

I assume you bought Property 2 before you bought Property 1? If not, you were not a first time buyer when you bought Property 2.

Property 3
Is there a third property in which you have an interest?

I also found out that I had signed a remortage for 38, 000 in 2006 which went on another of his properties. At the time, I thought I was signing for a change of mortgage lenders. We had gone to his solicitor, and nothing was explained to me. I cannot get my name off as he does not have the funds, so myself and him signed an Indemnity form through my solicitor, stating that I should not be liable for any costs etc.

Or did you remortgage Property 1 and he spent the additional money on Property 3.

Overall
Are the two mortgages with the same lender?
If so, you might be able to get them to agree to switch both back into one person only. They might not agree, but you certainly could try.

You should consult your own solicitor to try to unravel this mess.