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Transfer of equity refers to the change that is made when someone is added to or removed from property ownership.
It is not necessarily a straightforward process, and there are several important considerations to take into account before the transfer is carried out, including tax implications, lender requirements and protecting your interests in the event that you transfer your property into joint names with someone else but subsequently separate.
At Glanvilles Solicitors, we understand the complex nature of property interests, and we can identify any risks to you as well as advise you of the best way to proceed with a transfer. It is important to instruct property experts when dealing with a transfer of equity because of the substantial nature of an interest in property. If you are not advised properly, there is a risk you could ultimately lose your home.
Our property team have many years of experience representing clients across a whole range of property transactions, including transfers of equity and complex ownership issues. We can advise you of your options and ensure that you understand the implications of a transfer of equity.
We are used to the demanding nature of property transactions, and we always work proactively to avoid unnecessary delays.
For information about our transfer of equity fees, see our residential conveyancing pricing.
If you need help with a transfer of property ownership, our team will be happy to help.
Contact your local Hampshire or West Sussex branch in Chichester, Fareham, Havant or Petworth or fill in our simple online enquiry form for a quick response from one of our new build property conveyancing solicitors.
Because of the depth of knowledge and experience that our property team have, we are regularly instructed in complex issues. We always ensure that a transaction is in our client’s best interests and that they are clear about the consequences of transferring equity in a property.
We can advise on related issues such as stamp duty and mortgages. We have colleagues in adjacent areas such as family law and estate planning who can also advise you where necessary so that you can be sure that your assets are properly protected.
When you choose Glanvilles, you can be sure that you will receive a full service and that our advice to you will be tailored to your individual circumstances.
We are conveyancing experts and are accredited by the Law Society’s Conveyancing Quality Scheme.
At Glanvilles, we offer outstanding service as well as genuine legal expertise. You will have your own personal lawyer who will deal with your case and who will work proactively to move matters forward as quickly and cost-effectively as possible.
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When a property is transferred so that a new owner is added or an owner is removed, the Land Registry transfer form TR1 needs to be completed.
If you ask us to deal with the transaction for you, we will obtain copies of the title to the property from the Land Registry. If the property is subject to a mortgage, you will also need the consent of the lender.
If a new person is added to the title, the lender may want to put a new mortgage in place, with a similar process to a remortgage. If someone is being removed from the title, then the lender will want to be sure that the remaining owner will be able to meet the mortgage payments.
Before you start the process, you will need to ask your lender what their requirements are and provide them with any documentation that they need.
If you are adding someone to the legal title, then you can both use one firm of solicitors, although if they are paying money, they will need their own solicitor. If someone is being removed from the title, then they will need to take separate legal advice before the transfer is dealt with.
Once identity checks have been carried out, you will need to provide your solicitor with any money which is changing hands, for example, if you are buying out another party. They will carry out the necessary checks and draw up the transfer form for signature.
The next step is to sign and complete the transfer and, if required, the mortgage deed. If money is being paid, this will be transferred and the transfer dated as complete. We will then deal with the payment of stamp duty on your behalf and register the transfer with the Land Registry.
While it is not essential to have a solicitor for some simple transfers of equity, it is always advisable to take legal advice before carrying out a property transaction. If a lender is involved, then they will require you to involve a solicitor.
Where money is changing hands, both parties should take independent legal advice from a transfer of equity expert.
A straightforward transfer of equity can be dealt with in around a month by a solicitor. If a transfer of equity mortgage is involved, then the length of time taken will depend on how long they take to give consent to the transfer, carry out the checks they need to make and, if necessary, issue a new mortgage offer.
You may need to pay transfer of equity stamp duty, depending on the type of transfer and the value.
For example, if you transfer a share of your property to a new spouse or partner and the amount that you give to them exceeds the stamp duty threshold of £125,000, tax of 2% will be payable on the value of the transfer above the threshold. If they also take on a share of a mortgage, the amount of this is included.
If an unmarried couple separates and one buys out the other, then stamp duty is also payable if the value is above £125,000.
Where the transfer is a gift or part of a divorce settlement or inherited, no stamp duty is payable.
In some circumstances, capital gains tax may be payable on a transfer of equity. This can be the case even if you do not receive any money in exchange for the share of property that you are giving away.
By way of example, if you gift or sell your equity in a property to someone other than your spouse or civil partner, capital gains tax may be payable on the increase in value of the property since the date on which you acquired it.
There is currently a capital gains tax allowance of £12,300. If the increase in value of the share of the property that you are giving away exceeds this, then capital gains tax will be payable at a basic rate of 18%, or an enhanced rate of 28% (if the capital gain causes your income to exceed the basic tax rate) of the amount that exceeds the allowance.
This can be a complicated calculation, particularly where part of the rate is at 18% and part is at 28%. We can advise you as to whether you have any liability for capital gains tax and, if so, how much this will be.
If you need help with a transfer of property ownership, our team will be happy to help.
Contact your local Hampshire or West Sussex branch in Chichester, Fareham, Havant or Petworth or fill in our simple online enquiry form for a quick response from one of our transfer of equity conveyancing solicitors.
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