A transfer of equity alters the legal ownership of property and involves an existing owner of a property adding or removing one or more people to or from the title to the property. This differentiates transfer of equity from a sale or purchase of a property.

Transfer of equity solicitor – Why transfer equity?

There are a variety of reasons as to why property ownership might be transferred. Some common reasons include:

  • Revisiting joint ownership

In the current market, it is common for families or friends to pool their resources to purchase property. If in the future, one or more of these parties wish to ‘buy out’ the other joint owner(s), a transfer of equity is required.

  • Separation or divorce

Where there has been a relationship breakdown and a couple own a property together, they may decide to sell the property or transfer the property to one partner.

Depending on the circumstances and the agreement between the parties, the transfer to one party may be made for consideration (money) payable to the outgoing party.

If you are going through a divorce or separation and require legal advice and a solicitor for the transfer of equity, please speak to the Beverley Morris & Co. team today on 020 8852 4433 or email enquiries@beverleymorris.co.uk.

  • Tax efficiency

In some cases, transferring equity to children or other family members may be appropriate for tax purposes. In these circumstances, the property is treated as a gift, thereby minimising the tax owed.

Mortgage Transfer of Equity

A mortgage is a loan agreement. When a mortgaged property requires a transfer of equity, the outgoing party (if applicable) will need to be released from the loan agreement with the consent of the existing lender prior to completion of the transaction.

Alternatively, the new owner(s) can choose to obtain a new mortgage to enable the existing mortgage to be redeemed (paid off).

Where there is a new incoming owner and an existing mortgage is to be retained, the lender’s consent will be required. The lender will carry out various financial checks before issuing the required consent.

This is to ensure the new owners can pay the mortgage.

Where a mortgaged property is to be transferred, there are, therefore, a number of options available in terms of the borrowing required. We recommend you speak to a transfer of equity solicitor to determine the best option for you.

Tax Implications

Depending on the nature of the transfer, there may be tax implications to consider. These will depend on the circumstances and/or legal status of the parties and, in some cases, the reasons for the transfer. There may be Capital Gains Tax implications and Stamp Duty Land Tax implications.

In some cases, transfer of equity can help reduce inheritance tax (IHT) payable by beneficiaries.

To learn more about the potential tax implications, please get in touch today.

Equity Transfer Solicitors

At Beverley Morris & Co., our experienced solicitors can assist with all aspects of transferring equity, no matter your circumstances.

Find out more here or, for information about how we can help you, please call 020 8852 4433, email enquiries@beverleymorris.co.uk or fill in this online enquiry form.