With the Government’s proposed Inheritance Tax reforms on the horizon and rising concern around property being tied up in estates, more families are looking at ways to pass on wealth sooner.
One increasingly popular route is to transfer a share in a property to a relative, whether it is helping a child onto the housing ladder, adding a spouse to the title, or gifting part of a property to someone you trust.
While the idea might sound simple, the legal process of transferring a share in a property can be anything but. There also may be various tax implications which would need to be explored. If it is done incorrectly, it can lead to serious issues down the line so proper advice should be taken before entering into such a transaction.
What is a transfer of equity?
A transfer of equity is the legal process of changing who owns a share in a property.
You are not buying or selling the property outright, just adding or removing someone from the ownership.
This could be done after marriage, divorce, separation, or as part of wider estate planning.
For example, you might own a property outright but want to give your adult child a 50 per cent share, or you might want to add your partner to the deeds if they have moved in and started contributing to the mortgage.
This kind of transfer can be done whether the property is mortgaged or not (subject to lender approval), but the legal process varies depending on your circumstances.
The legal process behind amending property ownership
Every transfer starts with checking the current ownership structure. Are you the sole owner? Are you joint tenants or tenants in common?
This matters because it affects how ownership is shared and what happens if one of you passes away.
Next, a look at the title deeds and preparing a legal document called a Transfer Deed (TR1 form).
If there is a mortgage on the property, your lender will need to be involved too—they’re unlikely to approve the transfer unless the incoming owner can pass their financial checks.
Once everything is agreed, the new TR1 form is signed, witnessed, and submitted to the Land Registry. Depending on the value of the share being transferred, a Stamp Duty Land Tax (SDLT) return might also need to be filed, but don’t worry, as your solicitor, we will advise if that is necessary.
Transferring a share in a property can be a generous, thoughtful decision, but it should never be rushed.
We can help you do it properly so that everyone involved is protected.
If you are thinking about gifting a share of your property to a relative or partner, speak to our residential conveyancing team today.