How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask taxadvisor.uk Your Own Question
taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4972
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
54961312
Type Your Tax Question Here...
taxadvisor.uk is online now

My partner and i are splitting up and she has agreed to give

Resolved Question:

my partner and i are splitting up and she has agreed to give me 40% of the sale of the house.she said the solicitor cannot put the money into my account on completion because it might be seen as money laundering and said i will have to trust her to put it into my account.the mortgage is in her name.is this true & if it is could i draw up a legal agreement? also would i have to pay any tax ? thankyou.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Please advise -
was the property jointly owned or owned by your partner only?

Money laundering regulations can be addressed by alerting the bank of impending funds coming from sale of property.

You would be best advised to draw up a legal agreement as the amount involved is significant.

Many thanks
Customer: replied 2 years ago.

the mortgage &property are owned by my ex partner. i have been contributing a large amount for 15 yrs .The house was bought 17yrs ago. You did not answer the question about tax and would the legal agreement hold up in court ?

Expert:  taxadvisor.uk replied 2 years ago.

Thank you for your reply.

I was gathering more information from you before I could answer your question.

I take note that you have been contributing towards the mortage etc for past 15 years.
As the property is owned by your ex partner and the mortgage is in her name, any gain from sale of the property would be hers and she would have to report it on her tax return.

You state she has agreed to give you 40% of the sale of the house (not sure whether you mean 40% of sale proceeds of 40% of profit).

You would be best advised to draw up a legal agreement to ensure that she honours her word. A properly drafted agreement (seek a lawyer's help in drawing the agreement) would hold up in court.

You will not have to pay any tax on this money as the gain is made by your ex partner.
The amount you receive would be regarded as a potentially exempt transfer from her to you for inheritance tax purposes and the seven year rule would apply to it. In simple terms, if she survives for 7 full years after making the gift to you then the gift is out of scope of IHT. More informaation on gifts and implication on IHT can be found under "Gifts that might be tax-free" here

http://www.which.co.uk/money/tax/guides/inheritance-tax-explained/inheritance-tax-planning-and-tax-free-gifts/

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

taxadvisor.uk and other Tax Specialists are ready to help you

Related Tax Questions