Transfer of Equity

Transfer of Equity is the legal process where ownership of a property is changed.  Commonly a party is either added or removed from the title at the Land Registry and T G Baynes are able to help with this complex area of law.

A Transfer of Equity adding or removing a party to or from the title at the Land Registry seems straightforward but there are many pitfalls which a Solicitor will be able to explain to you and guide you through.

If the property is mortgaged, a Transfer of Equity will need the formal consent of the lender if the Transfer of Equity is to be made subject to the existing mortgage.  Most lenders have a formal application procedure and this should be the starting point for any transaction.  If a Transfer of Equity will involve taking out a new mortgage then the existing mortgage will need to be repaid and further legal work involved.  T G Baynes can deal with both the Transfer of Equity and Remortgage for you.

There is a possibility that Stamp Duty Land Tax may be payable on a Transfer of Equity where consideration (money) is paid to a party being removed from the title.  Any Stamp Duty Land Tax liability will depend on the amount of consideration paid, the balance of any existing mortgage secured on the property and the current Stamp Duty Land Tax thresholds

No Stamp Duty Land Tax is payable, regardless of the figures involved, where the Transfer of Equity is made in accordance with an Order of the Court in matrimonial/civil proceedings.

There are also potentially serious legal implications where a Transfer of Equity is made at an undervalue and the outgoing party is later declared bankrupt.   The Trustees in Bankruptcy of the outgoing party may apply to set aside the Transfer on the grounds the outgoing party transferred their share at an undervalue (less than open market value) in order to place their assets beyond the reach of creditors.

T G Baynes can offer advice in such a situation and discuss the risk involved.  If the property is mortgaged, Insolvency Act Indemnity Insurance will be necessary to protect the lender.

Commonly, a Transfer of Equity is needed for the following reasons:

Divorce or separation.  Following a divorce or separation, the partners may wish to legally transfer a jointly owned property back into the sole name of one of the partners.

Marriage.  Following marriage, if the matrimonial home is owned solely by one party, the married couple may wish to arrange to own the property jointly.

Transferring or changing the financial status of shares in the property. Some property owners buy a property jointly but do not wish to own the property on a strictly 50/50 basis.  If this is the case a trust deed is set up to explain the share that each partner owns. If the property owners later decide to change the percentages a Transfer of Equity would be needed plus the trust deed would need to be changed

Family tax planning. Preserving respective interests in the property for the benefit of children/other beneficiaries.

Whatever the reason for the Transfer of Equity what may appear to be a simple arrangement can be quite complex and legal advice should be sought.

To find out how we can help and obtain a quote for Transfer of Equity please e-mail Duaa Izzidien on duaai@tgbaynes.com​ or call 01322 295554

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