Professional, friendly and understandable advice about what to do when the legal ownership or status of a property needs to change.
Transfer of equity happens when circumstances require that the legal ownership or status of a property must change. Undertaking these transfers of equity can be complex and it's important they are completed correctly. 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.
Equally, you may have gone through a divorce and want to remove your ex-partner and co-owner's name from the title deeds. Your financial adviser or accountant may suggest that you undertake a transfer of equity to reduce future inheritance tax liabilities or 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 use expert legal advice to minimise tax liabilities and make sure everything is as you intend it to be.
Undertaking transfers of equity can have tax implications for you and those involved. Some transfers will be considered a 'gift' or a 'transaction at under value'. Depending on the value of a share in the property there may be stamp duty to pay, but some transfers of equity are exempt: for instance where a property is being transferred as a result of a court order following divorce proceedings. To check current stamp duty rates visit the HRMC website but we can 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 if the person making the gift becomes bankrupt within two years of the date of the gift (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 and in some cases may recommend title insurance in certain circumstances.
In certain situations you may find it better to get advice and remortgage your property rather than arrange a transfer of equity 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. 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 and lenders will usually charge administration and valuation fees for this. They'll also insist that a solicitor undertakes the legal aspects of the transaction.
We can help you with every aspect of transfer of equity. Our experts will protect your interests and keep you fully advised of all the implications. To get free, no obligation, advice, give us a call on 03700 868 686 or contact us online.