We are getting married/ setting up home together and want to transfer one partner’s property into our joint names
Answer.
There is no SDLT (Stamp Duty Land Tax) relief for transactions in connection with marriage or entering into a civil partnership. SDLT is charged where an interest in land is transferred for consideration. Consideration will include
any cash payment and any assumption of liability to pay the current mortgage. The liability assumed is taken to be a proportion of the outstanding mortgage corresponding to the proportion of the share of the property which is acquired.
Example 1
A house is valued at £180,000. The transferring partner has equity of £90,000 and there is an outstanding mortgage of £90,000.
The partner coming on to the property (transferee) pays a cash sum equivalent to half the equity and acquires a 50% share in the property.
The consideration in this case will be the cash payment (£45,000) plus 50% of the outstanding mortgage (£45,000) = £90,000. As this is below the stamp duty land tax threshold of £125,000 there will be no tax to pay.
The partner coming on to the property (transferee) pays a cash sum equivalent to half the equity and acquires a 50% share in the property.
The consideration in this case will be the cash payment (£45,000) plus 50% of the outstanding mortgage (£45,000) = £90,000. As this is below the stamp duty land tax threshold of £125,000 there will be no tax to pay.
Example 2
A flat is valued at £250,000. The transferring partner has equity of £100,000 and there is an outstanding mortgage of £150,000.
The partner coming on to the property (transferee) pays a cash sum equivalent to half the equity and acquires a 50% share in the property.
The consideration in this case will be the cash payment (£50,000) plus 50% of the outstanding mortgage (£75,000) = £125,000. As this is below the stamp duty land tax threshold of £125,000 there will be no tax to pay.
The partner coming on to the property (transferee) pays a cash sum equivalent to half the equity and acquires a 50% share in the property.
The consideration in this case will be the cash payment (£50,000) plus 50% of the outstanding mortgage (£75,000) = £125,000. As this is below the stamp duty land tax threshold of £125,000 there will be no tax to pay.
Terms and Conditions apply
