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Gifted Deposit on a Joint Mortgage

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  • Ausmo87
    started a topic Gifted Deposit on a Joint Mortgage

    Gifted Deposit on a Joint Mortgage

    Hi there, I have a question about a gifted deposit towards a joint mortgage.

    A couple of years back, me and my sister both gifted my mother (and our intention was our mum *only*) £10,000 each, towards her and her partner's joint mortgage.

    On the gifted deposit letter that I and my sister signed, we were both very clear in writing that the gift was for our mother only - we only wrote her name. These letters were then sent off to her mortgage broker.

    Fast forward to 2024 and my mum and her partner are splitting up, and they are arguing over home equity. Her partner seeks half of the gifted deposit which my sister and I signed over to my mum.

    We've received copies of the original gifted deposit letters from the mortgage broker, and it would appear that they themselves have crudely written in my mother's partner's name, after her own. Neither of us consented to this, nor wrote my mother's partner's name on this letter.

    It's very clear from the letter that the broker (or someone else) wrote her partner's name in; the handwriting is completely different, and also in a different colour of ink to what my sister and I had written.

    My questions are as follows:

    1. Does this entitle my mother's partner to half of the gifted deposit, which we had intended only for her.
    2. Is it a requirement for a gifted deposit in a joint mortgage situation, to be gifted 50/50 to both applicants; hence they felt at liberty to add my mother's partner's name?
    3. If 2. is "no" - does this then mean settling with my mother's partner; giving him half of the gifted deposit as part of the proceeds from the property sale, and then suing the mortgage broker for the difference?

    I should note; in case relevant, that this would come under Scottish law, and both are unmarried. My mother's (now) ex-partner is not our father.

    TIA!

    Tags: None

  • atticus
    replied
    You need to balance those considerations.

    Leave a comment:


  • islandgirl
    replied
    Originally posted by atticus View Post

    A common approach is for the person advancing money to take a second charge on the property to secure repayment.

    A gift is a gift, with permanent transfer of ownership. If repayment is expected, it is a loan.
    Thank you Atticus. The problem with that is it would not remove the money from one's estate for IHT?

    Leave a comment:


  • atticus
    replied
    Originally posted by islandgirl View Post
    This is a very interesting question as many of us with grown kids want to help them get a place with their partners but do not want to lose the whole amount if they split. It would be fair for the gifted deposit to be returned to the individual to whom it was given and the rest of the proceeds of any sale split 50/50. But how do you achieve that?
    A common approach is for the person advancing money to take a second charge on the property to secure repayment.

    A gift is a gift, with permanent transfer of ownership. If repayment is expected, it is a loan.

    Leave a comment:


  • islandgirl
    replied
    This is a very interesting question as many of us with grown kids want to help them get a place with their partners but do not want to lose the whole amount if they split. It would be fair for the gifted deposit to be returned to the individual to whom it was given and the rest of the proceeds of any sale split 50/50. But how do you achieve that?

    Leave a comment:


  • Ausmo87
    replied
    Hey - thanks for your response.

    Gotcha - so in-essence then - the gift and the equity in the house are 2 completely different things, and the "gifted deposit" essentially ceased to exist once it was "used"?

    I think where my mother is coming from is that she sees herself as having put down a larger deposit on the home than her partner; which was made possible by our gifted deposits. She's now quite bitter that the deposit would then be split 50/50 - leaving her out of pocket.

    Leave a comment:


  • Pezza54
    replied
    This is my opinion. Other forum users may disagree
    I assume your mother and partner are registered as joint tenants at the Land Registry and the mortgage was a joint tenancy mortgage
    When two people agree to buy a property as joint tenants they accept their beneficial interest is split 50/50
    This means that unless by consent or court order the net proceeds of the property sale are split 50/50
    Your mother's partner may have been paying more towards the mortgage and upkeep of the property

    When you wrote to the mortgage broker making it clear the money gift was for your mother only to pay off some of the outstanding balance in her joint mortgage, the broker should have told you what would happen if your request was followed through and then the couple split up selling the property

    Leave a comment:

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