How is a beneficial interest in property calculated?

[rollerskate]

My partner has amassed quite a high level of unsecured personal debt within the last year and as a result of ill health and job changes is going to struggle to make repayments each month going forward. Stepchange have suggested the best course of action might be to go bankrupt.

We live together in a house that is solely in my name, mortgage in my name and deposit funded by my savings. We are not married but do have a child together. Council tax is in joint names, all other utilities in my name only.

One of our concerns is that if the official receivers consider him to have a beneficial interest in the property, our home could be at risk. Can someone advise me as to how they would calculate a beneficial interest? For information, we split the household bills (including mortgage payment, although he treats it as a rent) in half although he hasn’t paid every month due to his financial predicament.

The OR enquiry line, Stepchange and CAB are all unable to tell me how a beneficial interest would be calculated, only that it would be down to the individual OR to calculate if my partner goes down the line of bankruptcy. Would it just be based on 50% of the capital portion of the mortgage repayment since we moved here?

Many thanks in advance.

[MIKE770]

Peridot

[Jinxer]

I'll be interested in the answer to this as I have always thought in this scenario that what's yours is yours and what's his is his.

[Crazy council]

Hi

If you considering or being pushed into bankruptcy and you have a home with some ASSET IN

SPEAK WITH REPUTABLE SOLICITOR way before you go down that path. theres a few on the linked site justbeagle.

beficial intrest can be caluculated but you need the full finances over the period for both.

https://www.insolvencydirect.bis.gov...rt4/part_4.htm

section 31.3.130 for owners and benefical interest 31.3.132 for understand what the trustee may look for

[Peridot]

Hi Rollerskate,

This is the section CrazyCouncil is referring to, you've probably had a look already but for ease here it is:-
31.3.132 Factors to take into account in deciding if there was an intention to share beneficial interest and, if so, in what proportions
The court has held that, in deciding the shares in which a property is to be held, each case will turn on its own facts. Matters to be taken into account include:

• Creation of a trust (see paragraph 31.3.134).
• Advice or discussions at the time of transfer which shed light on the parties’ intentions.
• The reasons why the home was acquired in joint names or in a sole name.
• The reasons why (if so) it was intended that the property would pass to the survivor should the other party die (jointly owned only).
• The purpose for which the property was purchased.
• The nature of the parties’ relationship.
• Whether the parties’ had children for whom they both had a responsibility to provide a home.
• How the purchase was financed initially.
• How the monthly mortgage repayments were made and by whom.
• How the parties arranged their finances, whether separately, together or a bit of both.
• How they discharged the outgoings on the property and other household expenses.
• Any capital improvements to the property and who financed them/made loan repayments. These should be significant. Repairs and decoration, unless significant should not be taken into account.
• Consideration of life events e.g. separation of the parties.
• Liquidation of other joint assets after purchase of property.

The court has held that, even taking all this into account, cases in which the joint legal owners intended that their beneficial interests would be different from their legal interests would be very unusual.

So it will be important how long you've been together, whether you bought the property together, what works have been carried out at the property and who paid for them, what equity there is in the property once the mortgage is paid off and how you initially purchased the property deposit etc.

If it was decided that your partner did have a beneficial interest in the property then it would be likely 50% of what's left after mortgage, secured loans and sale costs paid etc. If it was decided your partner had a beneficial interest, it would be unlikely you'd have to sell the property where this is a family home (depending on the amount of debt, equity in the property, age of child etc, although a charge could be placed against it.

Hope this clarifies a bit? Do pop back if you have any other queries we may be able to help point you in the right direction.