Transfers of equity for residential properties

When you get married or enter a civil partnership, you may wish to add your partner’s name to the property title or transfer full ownership into joint names. This can help align your financial arrangements and provide peace of mind. However, it’s crucial to understand the legal and tax implications, especially around stamp duty and inheritance tax. Our team will help you make informed decisions and ensure all paperwork is handled correctly.

For couples who live together without formalising their relationship through marriage or a civil partnership, transferring equity can help establish joint ownership. This step is often taken when one partner contributes financially to the mortgage or property upkeep. Our solicitors can draft a deed of trust to clearly outline each partner’s beneficial interest, avoiding disputes later and ensuring a fair agreement that reflects your contributions.

You might want to transfer a property or part of it to your children or other family members as a gift. While this is a generous gesture, it comes with potential tax implications, including capital gains tax and inheritance tax. We provide expert advice to help you navigate the legal process, minimise tax liabilities, and protect your family’s financial future.

During a separation or divorce, one of the most significant assets to consider is the family home. If you need to transfer ownership entirely to one party or adjust the existing shares, it’s essential to have clear legal guidance. We handle transfers of equity sensitively, ensuring your rights are protected and the process is as straightforward as possible, including liaising with mortgage lenders for consent or arranging a remortgage if necessary.

When dealing with the estate of a loved one who has passed away, transferring property ownership may be necessary as part of the probate process. This could involve transferring the title to beneficiaries or selling the property to settle debts. Our experienced solicitors can manage the legal aspects of the transfer, helping to ease the burden during a difficult time and ensuring compliance with inheritance tax requirements.

If you own property through a limited company, there may be strategic benefits to transferring it into individual ownership, a process known as de-enveloping. This can help reduce ongoing costs and simplify tax reporting. However, de-enveloping can be complex, especially if the property is held in an offshore company. We provide clear, tailored advice to guide you through the process, considering both legal and tax implications.

Any transfer of equity may involve significant tax liabilities. It’s vital to understand the potential tax consequences to avoid unexpected costs:

• Stamp Duty Land Tax (SDLT): If you are transferring equity to a spouse, partner, or family member, you may still be liable for stamp duty, depending on the value of the share being transferred and any outstanding mortgage. This applies even when no money changes hands.
• Capital Gains Tax (CGT): If you’re gifting a property or a share of it to a family member, capital gains tax may apply, especially if the property is not your primary residence. The tax is calculated based on the increase in the property’s value since it was first acquired.
• Inheritance Tax (IHT): Transferring property to your children or into a trust may trigger inheritance tax, depending on the value of the property and your estate. This is particularly relevant if the transfer is viewed as a ‘gift’ for IHT purposes.

Our team of solicitors will assess your situation, provide clear advice on your tax obligations, and work closely with tax experts to help you minimise liabilities.

If there is an existing mortgage on the property, the consent of your lender is required before any transfer of equity can proceed. This is because the lender needs to ensure the new ownership arrangement won’t affect their security on the loan. There are two common scenarios:

• Deed of substituted security: If the lender consents to the transfer, a deed of substituted security may be needed to reflect the new ownership arrangement. This legal document updates the mortgage agreement with the new owner’s details.
• Remortgaging: In some cases, the existing mortgage may need to be refinanced. This could involve applying for a new mortgage under the new ownership structure, which may affect interest rates and terms. Our solicitors can help you navigate these discussions with your lender and manage any necessary paperwork.

When property is owned jointly, it’s essential to establish how the ownership is divided. This is where a deed of trust becomes crucial:

• A deed of trust is a legal document that outlines each person’s beneficial interest in the property. It clarifies who owns what percentage, which is especially important if the property was purchased with unequal contributions or if there are plans for future changes in ownership.
• This document helps prevent disputes later , particularly in cases of relationship breakdown or when the property is sold. Our team will carefully draft the deed of trust to ensure it accurately reflects your intentions and protects your interests.

A transfer of equity is rarely straightforward, and even minor errors can lead to costly consequences. Seeking expert legal advice is crucial to ensure the process is handled correctly, tax liabilities are minimised, and your interests are protected. At Anthony Gold Solicitors, we offer a tailored approach, working closely with you to understand your unique needs and providing clear, comprehensive guidance at every step.