Transfer of equity is when circumstances require the legal ownership or status of a property to change. Undertaking these transfers of equity can be complex, and it’s important they are completed correctly. We provide full equity advice on a national basis.
There are several situations in which property owners might wish to undertake transfers of equity. You may get married or re-marry, and wish to add your new partner’s name to your deeds. Fletcher Longstaff provide professional, expert legal services and equity advice.
Equally, you may have gone through a divorce and want to remove your ex-partner’s name from the title deeds. Your financial adviser or accountant may suggest that you undertake a transfer of equity. This can help to reduce future inheritance tax liabilities. It also allows you to take advantage of personal capital gains limits, should you sell the property in future. You may simply wish to change the percentage share of the property owned by the co-owners. Whatever the reason, you should contact us for expert legal advice.
Tax and stamp duty
Undertaking transfers of equity can have tax implications for you and those involved. Sales will be considered either as a ‘gift’ or a ‘transaction at under value’. Depending on the value of a share in the property, there may also be stamp duty to pay. Some transfers of equity are exempt, for instance where a property is being transferred as a result of a court order. This is often the case following divorce proceedings. To check current stamp duty rates feel free to visit the HRMC website. We are more than happy to advise you on whether you’ll have to pay stamp duty in your specific case.
If transfers of equity are effectively a gift of equity in the property, the law allows for transactions to be set aside. This is only if the person making the gift becomes bankrupt within two years of the date of the gift. Or five years, if the bankruptcy was known or imminent at the time of the transfer. We can advise on how insolvency law could apply to you. It may be a case of recommending title insurance in certain circumstances. But we will run through this with you so there’s no need to worry.
In certain situations you may find it more beneficial to get advice and remortgage your property. Particularly if all you want to do is take advantage of a more attractive mortgage deal. That way, you will offset all or some of the costs involved in transferring ownership. We are on hand to give you full equity advice.
If you must change the ownership of a property with a current mortgage, you’ll need to seek your lender’s approval to do so. Their priority will be to ensure the remaining owners or new owners provide adequate security. Lenders will usually charge administration and valuation fees for this. They’ll also insist that a solicitor undertakes the legal aspects of the transaction.
The next step
We can help you with every aspect of transfer of equity. Our experts will protect your interests and give you full equity advice. Keeping you fully advised of all the implications. To get free, no obligation, advice contact us on 01522 581080.