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Joint debt?

11 May 2010
Issue: 4254 / Categories: Forum & Feedback
An unmarried couple purchased a house together with a joint mortgage. Shortly before his death, one of the owners repaid the outstanding balance of the mortgage and HMRC are treating half of this as a failed potentially exempt transfer

In 1999 my client Miss S and her boyfriend Mr R bought a house together (tenancy in common). Her income was very modest his was good.

My client contributed £101 000 Mr R contributed £85 000 and they took out a joint repayment mortgage for £260 000. Mr R always paid the mortgage as Miss S’s income would never have enabled her to bear the cost.

It is not clear why Miss S was a joint mortgagor because Mr R’s income alone would probably have met the lender’s criteria at the time. Miss S simply signed the papers put in front of her.

After many years the relationship broke down and Mr R moved out. Shortly afterwards and just before his death he sold his business and without taking any professional advice repaid the outstanding mortgage balance (about £160 000).

The executors’ solicitors...

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