Name on home ownership deed (10%), but not on mortgage?

Hi,
I've been in UK 10 years, and have ILR. Hubby owns a flat, which is being rented out (we're living elsewhere temporarily), and we're hoping to purchase a new flat together (sort of).

As I'm on extended maternity leave, ie have not really gone back to work, I am not earning anything (except Child Benefit). Because of that, and 1) FATCA reporting requirements on US citizens for all banks ,  2) US citizens automatically fail UK credit checks, and 3) US tax implications which I don't understand, we've been advised to keep my name off the mortgage.

BUT, as I hope to contribute a decent chunk of the deposit, by wiring some funds from my US investment accounts, I would like to have my name on the home title/deed. I've heard this is possible - an American friend says she owns 10% of her and her hubby's flat.  But she is somehow also on their mortgage (I dont know how, as she is also on extended maternity leave).

Do I just tell the solicitor (once we find one) that I am not on the mortgage, but want to own a percentage of the flat?

My US tax guy says it's ideal if the flat is just owned by my hubby, but that if I want to own 10% that shouldnt be a problem, because if we sell, my profits would be so low, I probably wouldnt have to pay US housing-related capital gains tax.

Has anyone else done this? (Owned a small percentage of their and their partner's UK home). Anything else I should know?

Thanks!

The fact that you don’t work and are a US citizen should not be a reason to keep you off the mortgage and deed. Assuming this new home would become your principal residence, you could exclude $250,000 in gains from US taxes if you sold the home. You may have a foreign currency gain whereby the amount you are paying off is currently valued higher than the amount you originally borrowed. This foreign currency gain would be taxable on your US return. You may not claim a foreign currency loss for US tax purposes.
Every marriage is different. My spouse and I consider are assets split 50/50.  Why would you only ask for 10% and not 50%.

Completely possible to own part of a property in England and Wales (and I assume in Scotland and Wales as well though the law is different there); though that won't be shown on the title register itself - what you will have is both of you listed as owners, and then a separate agreement setting out the proportional holdings. The separate agreement is then noted on the title register separately.

In terms of a mortgage, I'm not sure whether lenders will be set up for this kind of ownership as it is a little unusual (and some high street lenders just operate on a tick box process and may not be set up for this), but suggest that you ask some to see. Mortgage lenders will likely want both of you on the mortgage though (which give rise to issues in terms of liability for the debt (this is usually joint and several, which means that both of you are liable for the whole of the debt) and the amount of the property you would own so you'd need to think about this).

What if you split up?

What if you split up?

Under UK law, the property would be divided equitably between the two parties.

Under UK law, the property would be divided equitably between the two parties.

Yes - subject to the separate agreement between the parties I mentioned above in the absence of other factors (i.e. for example if divorcing there are other considerations as well in terms of how the value is divided. There are also rights that can be implied by contributions to the household etc, but that's quite a complex area of the law). If you are thinking about this, I would strongly recommend that you get proper legal advice on your position.

Sometimes judges do some weird stuff.

Just that the statement, "I will put a considerable amount of money into this thing I will not have my name on" made me suck air a bit.

Sometimes judges do some weird stuff.

Just that the statement, "I will put a considerable amount of money into this thing I will not have my name on" made me suck air a bit.

It's tough to do in real life.  Especially when I've been burned in a marriage once before.

Sometimes judges do some weird stuff.

Just that the statement, "I will put a considerable amount of money into this thing I will not have my name on" made me suck air a bit.

It's tough to do in real life.  Especially when I've been burned in a marriage once before.

I did it.  80% of our down-payment was my savings.  So far, I've put considerably more into our house than my husband has, but it's all in his name.  We have no written agreements or arrangements.  I'm strangely comfortable with this.

I did it.  80% of our down-payment was my savings.  So far, I've put considerably more into our house than my husband has, but it's all in his name.  We have no written agreements or arrangements.  I'm strangely comfortable with this.

A wise person would protect their investments and not leave it up to faith / trust.  There are countless stories about families torn apart over an inheritance.  Couples divorcing and one taking more than they deserve/put into the relationship.  Children losing their inheritance to a step-parent.   I have a relative whose spouse passed away and had to fight his family for ownership of their home.  The home had been purchased under his name.  Long legal battle. This is a well-educated woman (US graduate degree) who had become a stay-home mother.  She let her husband manage all their finances given his finance career.  After he passed away, she realised she should have been more involved and of course had her name on the title / deed to the house.

A wise person would protect their investments and not leave it up to faith / trust.  There are countless stories about families torn apart over an inheritance.  Couples divorcing and one taking more than they deserve/put into the relationship.  Children losing their inheritance to a step-parent.   I have a relative whose spouse passed away and had to fight his family for ownership of their home.  The home had been purchased under his name.  Long legal battle. This is a well-educated woman (US graduate degree) who had become a stay-home mother.  She let her husband manage all their finances given his finance career.  After he passed away, she realised she should have been more involved and of course had her name on the title / deed to the house.

We don't have children (either together or through previous relationships).  If my husband dies, I will struggle to want to stay in our home without him (at the same time, I wouldn't want to leave our home... I'd kind of struggle to exist anywhere), but he has expressed to me on more than one occasion that it would make him happy at the end if he knew I was going to stay here and be provided for.  I trust him in that regard.  And if forces somehow conspired against me so I wasn't able to stay here, I am comfortable in my own finances to take care of myself.

If we were to split up (obviously, a thing I can't fathom, but nobody ever does, do they?), I am, again, comfortable in my own finances to take care of myself.  If I had to walk away tomorrow, taking nothing from our shared resources with me, I'd be okay with just what's mine (and kept separate).  Nothing's been left to trust/faith except the house ownership.  And that was an educated decision.

Jfkimberly - sounds like you are in a positive, healthy relationship and feel financially secure.  You are fortunate. I can now understand your position on your home's ownership.

 Every relationship is different and every person's financial situation is different.  Purchasing a home takes financial resources and homeownership can create wealth / security.  Thus, how it's titled / held should be something carefully thought about. 

My home in the US was previously owned by an older couple who lived in it for 20+ years.  The husband passed away and his trust sold it.  I don't know if the trust only included his sons from his first marriage or also his second wife.  He had told his wife that she would be taken care of if something happened to him.  He did keep that promise but not to the extent she expected.  The sons wanted to sell the home and cash out.  The woman who had lived in my home for 20+ years was forced to move to a condo away from the town she had lived in for so many years.  I heard through sources that she was shocked she had to move because the house was being sold.

My home in the US was previously owned by an older couple who lived in it for 20+ years.  The husband passed away and his trust sold it.  I don't know if the trust only included his sons from his first marriage or also his second wife.  He had told his wife that she would be taken care of if something happened to him.  He did keep that promise but not to the extent she expected.  The sons wanted to sell the home and cash out.  The woman who had lived in my home for 20+ years was forced to move to a condo away from the town she had lived in for so many years.  I heard through sources that she was shocked she had to move because the house was being sold.

Second marriages of blended families REALLY need to know the ins and outs of things.  When my grandmother remarried after my grandfather passed away, she and her husband (who was also widowed), ensured they had a prenuptial agreement.  It's just what you do.  They had a crystal clear plan on what happened with homes, money, assets, etc.

My inlaws purchased a home a couple of years ago with my aunt-in-law.  I asked about that setup and found they also have an excellent plan in place.  My question for them was - if the inlaws pass away first and aunt-in-law is in the home.  What if AIL remarries?  And what if she passes away.  What happens to her now-husband?  They were able to answer everything for us and that's what we needed to know. 

I'm sorry your friend was in that situation.  Not cool.

So how would this work if one is a British citizen by birth and a US citizen?

As a US citizen, if you ever sold your home in the UK and had gains including currency gain, it would be taxable. You can exclude up to $250,000 of the gain in your US tax return or $500,000 if you file jointly with your spouse.  Don’t know UK tax implications.