Remortgage
Transfers of equity often happen alongside a remortgage.
Conveyancing Services
Transfer of Equity: How It Works
A transfer of equity changes who owns a property without a full sale: adding a partner, removing an ex, or buying out a co-owner. The tax and paperwork differ depending on where the property is.
England & Wales
The Process Under the Law of England & Wales
A transfer of equity changes who legally owns a property without a full sale: adding a spouse or partner to the title, removing someone after a separation, buying out a co-owner, or transferring a share to a family member. The existing owner stays on the title; only the ownership shares change.
Your solicitor prepares a transfer deed (form TR1), obtains any lender consent required, deals with the release or substitution of a departing owner from the mortgage, and registers the change at HM Land Registry. Where money changes hands or a mortgage is taken on, Stamp Duty Land Tax may be due on the consideration.
Tax and mortgage points
SDLT can apply where the person taking on a share also takes on a proportion of the mortgage debt, the debt assumed counts as consideration. There can also be Capital Gains Tax consequences on transfers between people who are not spouses or civil partners. Take advice before assuming a transfer is tax-free.
Key Steps in England & Wales
- Solicitor instructed, title reviewed
- Lender consent obtained (if mortgaged)
- Transfer deed (TR1) prepared and signed
- Departing owner released from the mortgage
- Any SDLT on consideration calculated and filed
- Change registered at HM Land Registry
Scotland
How It Works Under Scots Law
The concept is identical in Scotland, but the deed and registry differ. Your solicitor prepares a disposition transferring the relevant share, obtains lender consent where there is a secured loan, and registers the change with Registers of Scotland. A departing owner must be released from, or substituted on, the standard security.
Where consideration passes, including a share of mortgage debt taken on, Land and Buildings Transaction Tax may be due, and if the transfer involves an additional dwelling the Additional Dwelling Supplement can arise. The LBTT return goes to Revenue Scotland.
Tax and mortgage points
As in England, assuming a share of the mortgage counts as consideration for tax, and Capital Gains Tax can apply to transfers outside marriage or civil partnership. The thresholds and rates are the Scottish ones, so the figures differ from the English position.
Why Scotland Is Different
Scotland has its own legal system. The binding contract is formed by concluded missives, not exchange of contracts; property tax is LBTT (with the Additional Dwelling Supplement on second homes), collected by Revenue Scotland; title is registered with Registers of Scotland; and sellers must provide a Home Report before marketing. There is no CQS scheme in Scotland: firms are regulated by the Law Society of Scotland.
Common Questions
Transfer of Equity: FAQs
What is a transfer of equity?
It is a change to the legal ownership of a property without a full sale, for example adding a partner to the title, removing someone after a relationship ends, or buying out a co-owner. At least one existing owner remains on the title; the ownership shares are what change.
Do I pay stamp duty on a transfer of equity?
Possibly. Where the person acquiring a share also takes on a proportion of the mortgage, the debt assumed is treated as consideration and can attract Stamp Duty Land Tax in England and Northern Ireland, LBTT in Scotland, or LTT in Wales, once it exceeds the relevant threshold. Transfers for no consideration, such as a pure gift with no mortgage, are often outside the charge. Take advice on your specific figures.
Do I need the lender's permission?
Yes, if there is a mortgage on the property. The lender must consent to any change in ownership and to releasing or substituting a borrower on the loan. Where someone is being removed, the remaining owner usually has to demonstrate they can service the mortgage alone, or the property is remortgaged as part of the transfer.
Is a transfer of equity the same in Scotland?
The purpose is the same, but the mechanics are Scottish: ownership passes by a disposition rather than a TR1 transfer deed, the change is registered with Registers of Scotland rather than HM Land Registry, and any tax is LBTT rather than SDLT. A solicitor qualified in Scotland must handle a Scottish transfer.
Related Reading
Guides You Might Find Useful
Stamp Duty Explained
When tax applies, and how the thresholds differ across the UK.
What Conveyancing Costs
The legal fees involved in a transfer of equity.