What is a Transfer of Equity?

Anyone who has bought a home knows that the question of ownership is one of the early legal points to be decided. In whose name will the property be? On what basis will each party be able to lay claim to a share?

Well, things change. The plans put in place at purchase don’t always stand the test of time. And that’s where a transfer of equity can come into play. It is a way of changing the ownership structure by adding someone to or removing someone from, the title deeds.

There are various reasons for doing this. There may have been a relationship breakdown, calling for a jointly-owned family home to be put into sole ownership. But it is just as common for a transfer of equity to come into play in happier times; couples that marry or choose to cohabit often elect to share ownership of the home that one of them previously owned outright.

And transferring equity is not just something for couples. We also advise parents to reassign a share of their property to their children or put that share into a trust. This can be a smart move, not least because it can lead to Inheritance tax and Capital Gains Tax savings.

As you would expect, the formalities that effect a change of ownership of a property are many, and they can be complex.  If the property is mortgaged, for example, you’ll need the lender’s approval. There is also the possibility of Stamp Duty being payable. And, of course, the legal documents must provide the certainty you’ll need for the future.

So, what does this all mean for you? It means that you should go into an equity transfer with your eyes open. If you are the one giving away some of your interest in a property – however romantic, decent or generous a gesture that might be – it’s really important that you understand what is to be gained, and lost, by doing that. Likewise, if you are the person acquiring that equity, do you know about the practical and legal consequences?

Talk to us. We’ll explain the process, the possible outcomes, and the best way of structuring a transfer of equity for you.

Our dedicated Conveyancing Team can be contacted by calling, 01264 353411, emailing: conveyancing@bsandi.co.uk or you can fill in our no-obligation enquiry form on our website and someone will be in touch shortly.