Buying a house in the UK...

Another thread got me thinking....DH and I will be buying a house this summer and are thinking of putting it in his name only in order to avoid having to deal with US capital gains taxes down the line.  How will mortgage companies deal with this?  If the house is to be in his name only, will they only consider his income when determining how much to lend us or will my income be considered as well?

If its in his name only, then only his income can be used for the mortgage application.

Yikes! This just got me thinking. We are about to buy a house. In a few years we may sell and move to another country, so taking any profit/gain on that house and using it for a deposit on another house. I wonder if it would be best for us to have our house only in DH's (the Brit's) name for tax purposes down the line. Anyone have any ideas?

Sorry... i was formerly a mortgage advisor for the Halifax, but i have no idea what you guys are talking about with all this capital gains tax stuff.

tho i'm not an expert in capital gains tax....i'm thinking that the only way it can be avoided is if you purchase another house in the same country.  i believe the thinking is that if you go international with the profit from selling your house, you are no longer helping the economy of that country. 

i tried to find some info. on it...but was coming up empty handed.  my good friend is a realtor in the US.  i'll check with her and see if she knows anything about it.

An American is taxable on worldwide income and gains.  A Brit is not.  However an American living overseas may well want to own a UK property because he/she will want a mortgage interest deduction on his/her US tax return.

However if the American spouse owns the house and files a seperate return the entire capital gain over the exclusion of $250,000 will be taxable in the US plus there may well be tax on a foreign currency gain on repaying the mortgage.

For these reasons most advisers have had the Brit spouse own 100% (or 99%) of the home.

The situation is still not satisfactory in case of divorce later down the road, UK inheritance tax exemptions to a non-UK domiciled spouse or US gift taxes on sale. 

There are banks and mortgage brokers who will take both occupiers  incomes and indeed US credit history into account, they'll just need to be found.  Generally speaking buying a home is a good time to review both Wills and take independeny legal advice on these complex cross-border issues.

An American is taxable on worldwide income and gains.  A Brit is not. 

What about a dual UK/US citizen? Is that the same as an American citizen? My BF and I will probably be buying a house sometime this year as well. The issue with us is that I have a lot more money than he has -- but I don't work and he has a regular income. I had thought that perhaps I'd pay a sizeable downpayment on the house and then he could look after the mortgage payments. But if it's better for the house to be 100% (or 99%) in his name ... then ... is there a way for me to somehow transfer the downpayment money to him and then have him put it down? All so confusing!!

OK - as a dual US/UK citizen you are still subject to US taxes for ever but you probably know that anyway.  So you make him a gift; this eats into your lifetime gift tax exclusion which may well be a pain.

If he dies the house is (mainly) his and there is a huge bunch of UK inheritance tax to pay before you get the money back.  If you are non-UK domiciled then bringing your savings to the UK may attract UK taxes.  If they are already here or offshore then the US already knows about them...

Additionally buying a UK home is a bad thing for those of us who are either claiming detached duty relief or not ordinarily resident status in the UK.  Take advice is my motto!