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Understood, but I want to own an equity stake in the property to participate in any growth in its value. I want to end up with £150k (if that is the number) of equity.
Yes, but the problem is.....I don't know how much they will be able to sell their exsiting house for and so I don't know until then how much equity we will respectively own. That is the gist of this question.
No they cannot contrubute anything until they have sold the existing house.
I we do a deed of trust how would that work? I would buy it as the legal owner with the DoT saying that I am holding an unquantified amount on trust for them? Surely a DoT needs to specifiy the proportions of ownership?
£25 tip for this.
Not quite what I am after. The new house needs to be bought now, for £400k. If my parents sell their old house in 1yrs time for £250k I want them to have 62.5% ownership at that point. How can I set up a deed of trust now where the future ownership %'s are uncertain?
Yes. They should have no ownership if any kind until they have sold their first house.
No, because the sale price of the first house is uncertain and therefore the percentage is not known up front
I don't need a pre-agreement. And yes I agree the simplest thing would be for me to buy the whole house now for £400k and then sell them whatever proportion they are able to buy the proceeds of the sale of the first house. The problem there is that I will incur stamp duty when I buy 100%, and they will incur stamp duty on whatever proportion they buy from me in a years time. This is why I am asking the question.
OK. So on day one I buy 99% of the legal and beneficial interest in the new house. I grant them an option to buy "Up to" 62.5% of the legal and beneficial interest of the property for £250k. When they have sold the old house they exercise that option and pay me £250k.
Is there SDLT on the £250k?
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Pls cancel it