ok, so here's the situation.
I currently rent a house from a small private company that own a couple of properties.
Shortly after moving in I met the MD of the company and we started a relationship. Moving forward we are now looking at living together.
We decided that the property I am renting is better positioned than his current home and would both prefer to live there for the moment. If the lease agreement remains in my name and I continue making the payments, is there any legal reason that would prevent him from moving into my home when he is the MD of the company that I'm renting it from. It's on a buy-to-let mortgage so we don't want to do anything that invalidate the mortgage or result in him being accused of fraud under Scottish Law.
Replies (6)
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I've no idea about the law (this is an accounting forum)
but if he is going to live in accommodation owned by his company then he will be liable for a benefit in kind tax charge which will depend on the value of the property.
You might want to take some paid for legal and tax advice?
Accountant
I would expect him to have an accountant he could take advice from. I think it affects him more than you, so he should take the advice re the mortgage, personal tax and any matters arising with the company as you don't have the authority to deal with this.
Other than that, good luck with your moving in together.
BTL mortgage
He needs to look at his lender's terms and conditions. Most, if not all, BTL mortgages require a covenant from the borrower that neither they nor any member of their family will occupy or be permitted to occupy the property. This is designed to prevent, or at least deter, the practice of using a BTL mortgage with it's non-regulated status and underwriting requirements where the borrow (direct or vicarious) would not qualify for a personal mortgage. i.e. by occupying the property himself he could well be in breach even if not illegal.