This is a legal process where the ownership of a property is changed by one or more people being added or removed from the property title.
The common reasons people choose a Transfer of Equity:
- Marriage or Civil Partnership: adding a spouse or partner to the title.
- Divorce or break-up: removing a former partner from the title.
- Buying out a Co-Owner: one owner purchasing the other owner’s shares.
- Gifting property to a relative.
- Creating a more favourable tax position for the family.
Can we use the same solicitor, or does each person need their own solicitor?
It depends on the circumstances. Your solicitor will be able to answer this once they have all relevant information of the proposed transfer.
Are there any Tax implications on transferring your property?
- Stamp Duty Land Tax (‘SDLT’) may be payable if the transfer is for any payment, or if a mortgage debt is being repaid or remaining on the title.
- If you want to transfer your property as a gift, you may be liable for capital gains tax and there will be inheritance tax consideration.
Quastels’ Private Wealth team can assist with any tax queries involving transfers of equity and wider tax planning considerations.
What is the process?
- If the property is mortgaged, first speak to your mortgage lender as their consent may be required for the transfer.
- Take tax advice and appoint a solicitor. At Quastels, we can advise on the tax position as well as deal with the conveyancing (the conveyancing costs will be lower than a normal purchase).
- If the property is leasehold, a ‘licence to assign’ may be required, which is the landlord’s consent to the transfer. Your solicitor will check the lease to see if this is required and if so, will obtain it as part of the process.
- All parties to the transfer will need to sign a Transfer Deed with an independent witness.
- Once all above points have been satisfied, completion can take place and your solicitor will deal with any necessary payments.
- Depending on the circumstances, SDLT may be payable and your solicitor will lodge the SDLT return.
- If Leasehold, your solicitor will serve notice of the transfer upon the managing agents to ensure they update their records.
- As the final part of the process, your solicitor will send an application to H.M. Land Registry to update the property ownership details.
To discuss a Transfer of Equity, contact our Residential Real Estate team, and our Private Wealth & Tax team.
