Transfer of Equity

This depends on the nature of the transaction and whether any money or “consideration” is changing hands.

You may need to pay Stamp Duty if:

• Money is changing hands – for example, if you’re buying out another person’s share of the property.
• You take on mortgage debt – even if no cash is paid, if you’re assuming responsibility for part (or all) of an existing mortgage, this can be treated as “chargeable consideration” for SDLT purposes.

You are unlikely to pay Stamp Duty if:

• The transfer is a gift and there’s no mortgage involved.

The transfer is part of a divorce or civil partnership dissolution, as these transactions are usually exempt from SDLT (though certain conditions apply).

Capital Gains Tax (CGT) may apply when you transfer equity in a property, but it depends on your specific circumstances—particularly whether the property is your main residence, how the transfer is made, and whether any gain has been made in the value of the property.

You’re unlikely to pay CGT if:

• The property is your main home and you qualify for Private Residence Relief.
• The transfer is between spouses or civil partners, who are generally exempt from CGT on transfers between themselves.
• The transfer is part of a divorce or separation and is made during the relevant timeframe (usually within the tax year of separation or under a court order).

You may have to pay CGT if:

• The property is a second home or rental/investment property.
• You are gifting or selling part of a property that is not your main residence.
• You are transferring to someone other than your spouse or civil partner, and the property has increased in value since you acquired it.

CGT is calculated on the gain (profit) made since you acquired the property (or your share in it), after deducting any eligible reliefs and allowances.

Yes, in certain circumstances, a transfer of equity can help with inheritance tax (IHT) planning—but it must be done carefully and with appropriate advice. Transferring ownership (or part-ownership) of a property to a spouse, child, or into a trust can be a strategic way to reduce the value of your estate for inheritance tax purposes.

However, there are key rules and considerations to acknowledge such as the 7 year rule, capital gains tax, gifting a share of your property or transferring into a trust and thinking through future implications including changes in relationships.

The 7-year rule is an important part of inheritance tax (IHT) planning and applies when someone gifts part or all of a property through a transfer of equity.

In simple terms, if you give away part of your property (e.g. to a child or other relative) and live for at least seven years afterwards, the value of that gift is usually exempt from inheritance tax when you die.

If you pass away within 7 years the gift may still be subject to Inheritance tax.

• If you survive for 7 years after the date of the gift, the value of that gift falls outside of your estate for inheritance tax purposes.
• If you pass away within 7 years, the gift may still be subject to IHT, although the amount could be reduced depending on how long you lived after making the gift (known as taper relief).

There are rules concerning what is considered a ‘genuine gift’ eg If you continue to live in the property rent-free, HMRC may still consider it part of your estate (this is called a “gift with reservation of benefit”).

Yes, there may be other tax considerations including Income Tax and Trust Tax depending on who the transfer is between, the value of the property, and whether money or mortgage debt is involved. Understanding these implications at the outset is key to avoiding unexpected costs or compliance issues.

Yes — if your property is mortgaged, you will need your lender’s consent before proceeding with a transfer of equity. This applies whether you’re adding someone to the title (such as a spouse or partner), or removing a co-owner (such as in the case of a separation or buyout).

If you’re buying out another owner’s share and taking over the mortgage yourself, you’ll usually need to remortgage in your sole name. This can be done with your current lender (subject to approval) or by switching to a new lender. Your solicitor can help coordinate this alongside the transfer of equity.

Yes, you can transfer equity even if there is a mortgage on the property—but you’ll need your mortgage lender’s involvement and approval. In fact, most transfers of equity do involve mortgaged properties, especially in cases like divorce, separation, or buying out a co-owner.

Not always—but sometimes it’s required or strongly recommended.

Whether each party needs their own solicitor depends on the circumstances of the transfer, the relationship between the parties, and whether there are any conflicting interests involved.

In the context of a divorce or civil partnership dissolution, a transfer of equity is often used to formalise what’s been agreed (either voluntarily or through a court order) about what happens to the family home or other shared property.

It allows one party to be removed from the property title, with the other taking sole ownership, or in some cases, for ownership to be transferred to a third party (such as a trust or child).

Typical Scenarios Include:

• One spouse remains in the home, taking over full ownership and often assuming the mortgage.
• The property is transferred into one party’s sole name as part of the financial settlement.
• The property is held in trust (for example, for the benefit of children) with agreed conditions around its future sale or ownership.

We understand that divorce can be an emotional and stressful time. Our team will handle your transfer of equity matters with efficiency, discretion and clarity so you can focus on moving forward.

Not directly. While you can’t legally transfer equity to a person under the age of 18 in their own name, there are lawful ways to make a transfer on their behalf, usually by using a trust arrangement.

This is because minors (those under 18 in England and Wales) cannot hold legal title to property. However, they can hold a beneficial interest, meaning they are entitled to the benefit of the property (such as future proceeds from a sale), but the property is legally managed by someone else until they reach adulthood.

There are Trust law and tax rules which apply when transferring property to a minor, so it’s vital to get the structure right. There might also be Capital Gains Tax, Stamp Duty, or Inheritance Tax implications depending on your circumstances.

Yes, you can transfer full ownership of your property to another person, either as a gift or in return for payment. This process is still often referred to as a transfer of equity, but strictly speaking, it becomes a full transfer of ownership since you’re removing yourself entirely from the legal title.