Transfer of Equity on former residential home back to sole name

Transfer of Equity on former residential home back to sole name

10:41 AM, 23rd March 2016, About 6 years ago 6

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My husband and I are joint owners of one rented property plus our residential home. I bought the property in 1990 and lived there for 10 years. I then moved in with my now husband and have let the property since June 2000 to various tenants, the latest of which has now been with us for 12 years. Approximately 5 years ago, my husband and I married, joined our finances together and put this property into joint names (yes, why I hear you ask – big mistake??).sole name

I’ve been advised to transfer the property back into my name as we plan to sell it in 2017, as this will minimise the CGT liability as my husband has never lived in the property.

I have two questions, firstly, as the property is mortgage free, is it possible for us to do the transfer of equity without a solicitor/conveyancor? Secondly, will there be a SDLT liability when the ownership is put back to 100% in my name? Any other options that I’ve not mentioned but that may be available, would be greatly appreciated.

Thank you



by Neil Patterson

10:54 AM, 23rd March 2016, About 6 years ago

Hi Jane

On the SDLT question I got this off the .Gov site which you may want to check out >>

You may need to pay SDLT when all or part of an interest in land or property is transferred to you and you give anything of monetary value in exchange.

Anything of monetary value that you give in exchange is called the ‘chargeable consideration’.

The rules you use to work out how much SDLT you pay depend on the circumstances of the property transfer.
If you marry, enter into a civil partnership or set up home together

You might pay SDLT when you transfer a share in a property to a husband, wife or partner when you do one of the following:

enter into a civil partnership
move in together

You pay SDLT if the consideration given in exchange for the share transfer is more than the current SDLT threshold for the property type.
Example 1 – you don’t pay SDLT

A house has a value of £180,000. The owner of the property has equity of £90,000 and an outstanding mortgage of £90,000. The owner transfers a half share of the property to their partner.

Their partner:

pays cash for half of the equity – £45,000
takes responsibility for 50% of the outstanding mortgage – £45,000

So the consideration for SDLT is £90,000, made up of the:

cash payment
50% share of the outstanding mortgage

£90,000 is below the current SDLT threshold so there’s no tax to pay. You must still tell HM Revenue and Customs (HMRC) about the transaction on an SDLT return.
Example 2 – you pay SDLT even though no money changes hands

The owner of a property valued at £500,000 with an outstanding mortgage of £400,000 transfers half the property to their partner when they marry. Their partner takes on 50% of the mortgage (£200,000).

HMRC charge SDLT on the amount paid for a property or the amount of ‘consideration’ given.

By taking liability for the mortgage, the owner’s partner has given ‘consideration’ of £200,000 for their share of the property which is £1,500 SDLT (0% of £125,000 + 2% of £75,000).

They must pay SDLT on that amount and tell HMRC about the transfer by filling in an SDLT return.

The equity isn’t included in the calculation as you only pay SDLT on the consideration given.
If the transfer is a gift

If the transfer is a gift and there’s no consideration, SDLT doesn’t normally apply.
If you transfer property because of divorce, separation or the end of a civil partnership

You don’t pay SDLT if you transfer an interest in land or property to your partner as part of an agreement or court order because you’re either:

dissolving a civil partnership

This also applies if the partners either:

annul their marriage
legally separate

In these cases there’s no need to tell HMRC about the transfer, even if the value is more than the SDLT threshold.

I am no expert but if you do need our solicitors please see >>

by S.E. Landlord

12:09 PM, 23rd March 2016, About 6 years ago

I think you should take advice as to the CGT on current situation and if the property is transferred back to just your self. Whist in joint names you have two CGT allowances.

As to transferring the property between you, you do not need a solicitor and if a gift, no money consideration and there is not a mortgage on the property, my understanding is currently no stamp duty is payable - I don't know if it will attract the additional 3% stamp duty for second properties after 31st March.

The forms you need are available from the land registry website.

by Puzzler

17:20 PM, 23rd March 2016, About 6 years ago

Not sure it will minimize CGT as if it's joint you get 2 allowances and you should be able to claim lettings relief as it was your former home especially as it was prior to marriage. The fact that your hubby never lived there should not matter. However I think you need professional advice.

by Hazel de Kloe

10:08 AM, 25th March 2016, About 6 years ago

Definitely seek Lettings Relief as this is worth up to £40,000 off your CGT implication, I believe. Worth seeking advice from a qualified tax accountant. As for the SDLT, I think you've had some great comments already and can also seek advice from the SDLT office.

by Raj Kirpalani

21:21 PM, 25th March 2016, About 6 years ago

Is it possible to minimise SDLT prior to a transfer of equity by reducing the balance on your mortgage so that the consideration falls below the thresholds?

by SAK2020

0:06 AM, 14th July 2020, About 2 years ago

Reply to the comment left by Raj Kirpalani at 25/03/2016 - 21:21
Thats a good question as and as far as Im aware (with my somewhat limited knowledge) there isnt anything prohibiting you from minimising SDLT prior to a transfer of equity by reducing the balance on your mortgage so that the consideration falls below the thresholds. However if in doubt best practice is always to get legal advice. A decent article here to fill you in on the ins and outs of the transfer of equity process:

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