MenuHome Conveyancing Probate Wills Property Fraud Compromise Agreement Registration Free Download Contact Us
Transfer of Equity
Transfer of equity means the transfer in the share of a property. It could be that a person is (a) added on to the property or (b) removed from the property.
Sometimes a payment made to a party for coming off or made by a party for coming on the property. This has stamp duty implication.
In most cases, it is part of a divorce settlement or when a partner wishes to add their other partner/spouse to the property.
It can also be used when a parent wishes to make a gift to their adult children by adding their child(s) name to the property. Note that the transfer must be to an adult child otherwise the property has to be held in trust if the child is a minor.
Why does easylawyers get so many referrals?
We are currently UK’s leading solicitors firm for the transfer of equity of property.
The reason is simple – our competitively priced legal fees and quality of service.
We charge a fixed legal fee of £250 and disbursements.
Why Use easylawyersThere are lots of reasons to use our conveyancing service:
Solicitors Regulation Authority Regulated
No Advance Payment
No meetings necessary
Professional, experienced and friendly staff
Online access to your transaction
Total costs agreed in advance
No Hidden Extras
Direct telephone contact available
PROPERTY STAMP DUTYMany people ask us about Stamp Duty in Transfer of Equity. We hope the comments below shall answer your questions on the matter. Question. We are divorcing / splitting up and want to transfer a property from our joint names into the sole ownership of one partner
Answer. A transaction of this kind will be exempt from SDLT (Stamp Duty Land Tax) if it is effected in pursuance of a court order or an agreement between the parties in connection with divorce, nullity of marriage or judicial separation, or the dissolution of a civil partnership (Schedule 3 Finance Act 2003).
Otherwise, SDLT will be charged, based on the consideration given for the transfer including
any cash payment and
any assumption of liability to pay the current mortgage. The liability assumed is taken to be a proportion of the outstanding mortgage corresponding to the proportion of the share of the property which is acquired.
A house is valued at £350,000. The partners have equity of £200,000 and there is an outstanding mortgage of £100,000.
The person staying on the property title (transferee) pays a cash sum equivalent to 50% of the equity and acquires sole ownership of the property.
The consideration in this case will be the cash payment (£125,000) plus 50% of the outstanding mortgage (£50,000) = £175,000. This is above the stamp duty land tax threshold of £125,000 and the tax due on the consideration at 1% will be £1,750.
A flat is valued at £200,000. The transferring partner has equity of £100,000 and there is an outstanding mortgage of £150,000.
The partner coming on to the property (transferee) pays a cash sum equivalent to half the equity and acquires a 50% share in the property.
The consideration in this case will be the cash payment (£50,000) plus 50% of the outstanding mortgage (£75,000) = £125,000. As this is below the stamp duty land tax threshold of £125,000 there will be no tax to pay.
Easylawyers is regulated by the Solicitors (registration number: 523206). (You can check our status by telephoning the Solicitors Regulation Authority Public Enquiry line on 0870 606 2500). Easylawyers is the online business of Pindoria Solicitors Limited (company registration number: 7093710)