What to consider when making financial contributions to someone else’s property or buying property jointly.

During uncertain times many find themselves under increasing pressure to meet the financial demands of owning a property.  It is not surprising that some individuals are seeking to support their loved ones by alleviating some of this financial pressure.

For instance, a parent may enter into an agreement with their child that they will provide financial assistance when it comes to meeting their mortgage payments.

To ensure that these contributions are eventually repaid, the parties may agree to confer an interest in the property to the parent which is proportionate to their contributions. Whilst this arrangement may not immediately appear to be contentious, it is important to ensure safeguards are in place to avoid any dispute arising in the future.

Certainty that all parties share the same understanding as to the nature of the agreement is essential.

The best way to ensure this is to formalise the agreement in writing. The standard document which is used to facilitate such an agreement is known as a ‘declaration of trust’.

A declaration of trust records the agreement and sets out the relative share in which each interested party holds the property.

Our team of experienced tax specialists can advise on the tax consequences of being a beneficial owner of a property which can be particularly important to consider when the property is not your main residence.

Many individuals find themselves better equipped to buy a property with friends, a partner or spouse as joint occupants and owners.

A declaration of trust is an important instrument in this scenario as it can detail:

1. Who is responsible for the property outgoings
2. What will happen if one owner wants to sell but the other does not
3. What happens to the property if one of the owners passes away

We offer continuing advice and support to our clients throughout their lives as their circumstances change.

We can restructure a declaration of trust to reflect when the respective shares of the property owners have been varied as a result of their financial contributions, thereby protecting each individual’s interest in that property.

Contact Luke Page to find out how we can help you.