My Dad bought me an investment property - SDLT or CGT

[sandy2000]

Hi,

About 4 years ago, my father sold his home, and bought an investment property for my sister and me on "joint tenancy" from the proceeds of the house. It was an informal part-loan part-gift from him in case we couldn't pay him back. A year later when he needed some money, we applied for an investment loan, but due to our lack of credit rating my elder brother (who was not on the title) had to act as the guarantor, where he was not the beneficiary but was put on the mortgage being the guarantor and on the land registry title as a condition of the mortgage. Since the title remained as joint tenancy we donÂ’t know how to safeguard that my brother has no beneficial interest, no that he is getting married we want to keep things tidy. Income from the rented part is just enough to cover the mortgage and running costs. Can the arrangement be formalised now? And how?
Will any stamp duty be payable or even CGT, if we were to do that?
Do we have any risk of losing our house if we don't do anything in case my brother's marriage has problems later?

I don't doubt my brotherÂ’s integrity, but if anyone can help in pointing us in the right direction before we start bringing the question up, I'll be truly grateful.

Thanks
Sandy

[adelante]

I dont understand. You say in one sentence that your elder brother is not on the title but in the next that he is on the title as a condition of the mortgage !! Do you have any written agreement ?? You say the rented part so are you also living in the property ? Have you declared the income to the Tax office ?

[sandy2000]

Adelante

yes, he was not on the title originally (Dec 2002), but when he became the guarantor of mortgage (may 2004), the lender wanted his name PUT on the title as well as on the loan. So from last 1 1/2 years three names are on the title. My sister and I were in full time education, and didn't have enough income to qualify for a mortgage on our own at the time, and were living in it as well so coudn't rent the whole proerty.

the ownership originally was of "joint" type between my sister and me, and i believe it is still so. I cannot see any other written agreement in the papers.

Yes, my sister and I have declared the rental income before the mortgage, as it was over 4200 limit. In my last year's return, and rental has just barely covered the interest. I am not worried about the income or the interest payments because I am now working and can pay the mortgage even if rental doesn't cover it. I am more concerned about the benificial interest in the property, and any CGT or stampduty if my brother's name is take off, or his share in the ownership is formalised to say 0% or 1%

thanks regards