Top seven questions relating to Bank of Scotland transfer of equity
- I acquired a house with my cousin five.seven years ago Since purchasing the property, we have both got married. We are now looking to do a transfer of equity so my name is removed the Bank of Scotland mortgage. There is a meaningful difference between the value the lender hold and what the property would sell for currently. Can you offer any advice?
- My mum died early last year leaving a loan-free house to me and my half brother in equal shared. Having continues to reside at the house, there was a provision in her will specifying that the propertycould not be sold for 2 years after her passing so he could continue to live there for a specified time frame. He now wishes to remain in the house beyond the specified period. We have discussed a transfer of equity. Would I be right in thinking that we should get a valuation then he'd get a home loan in the usual way to acquire my equity?
- Have recently separated from my wife of 18 years. I'm now living with my parents again and she wishes to stay in the apartment and pay me off. What percentage am I entitled to. Is it half of the equity after redeeming the Bank of Scotland home loan? I assume proper valuations are necessary but I really need to be confident that I'm getting the best deal
- What if my application doesn't meet Bank of Scotland lending criteria for a transfer of equity?
- Do I need legal advice when doing a transfer of equity where the home loan is to remain with Bank of Scotland?
- In 2013 I bought a apartment without my partner's name on the ownership paperwork. My lawyer advised it is due to the fact that she was not in the mortgage with Bank of Scotland. I'm wondering is there any way that I can add her name on the title?
- My partner and I have 50:50 shares in a BTL. I am a top rate tax payer. Preferably I would like to do a transfer of equity to her sole name in order reduce our tax on the letting income. If Bank of Scotland are fine with this the legal fees are not high. However what happens when we sell? Would my GGT relief be lost.
Information that may be required from your conveyancer may ask about your Bank of Scotland Transfer of Equity
If are going to hold the property as beneficial Tenants in Common in unequal shares, what is the split to be. For e.g. 50-50, or 60-40?
Please provide a copy of your National Insurance Number?
Would you like us to draft you Declaration of Trust. If so are you happy to incur the additional fee (beyond the Transfer of Equity fee)?
Please confirm the person to be removed from the title deeds will not reside at the property after the transfer of equity has been formalised?
Please confirm whether you are receiving any payment as part of the Transfer or Equity and from whom and provide details of the amount?
Has one of the registered owners died? If so please forward us with a copy of all the relevant documents e.g. the will, death certificate etc..
Caveats to be read in further to the above Bank of Scotland transfer of equity Advice :
Tax and Legal
There are numerous potential tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the Bank of Scotland conveyancing panel and accountant before transferring equity.
Transfer of Equity Conveyancing for Leasehold titles
Should the tenure of your property be leasehold, the lease may have a requirement for notices to be served and that you have a license to do so from the freeholder. If such conditions are not strictly observed you may be in violation of your covenants under the lease. This could trigger the freeholder taking enforcement action against you.
If the transfer of equity is made pursuant to an Order of the Court, then Insolvency Indemnity Insurance is not required. In other cases, where a property is being transferred at less than market value between joint owners, an Insolvency Act Indemnity Insurance policy may be required. This is something that that your conveyancing solicitor will check with Bank of Scotland This is because, if the outgoing party is made bankrupt in the future, their Trustee in Bankruptcy could argue that they had transferred the property in order to avoid their creditors and apply to the Court to have the transaction set aside. If this happens, it could affect your lender or a future buyer from you as they would lose the property and the lender may not get back
what they have loaned to you. The Insolvency Act Indemnity Insurance policy only protects
lenders such as Bank of Scotland or future buyers from you. If there is no mortgage and the outgoing owner is made bankrupt, there is a risk to you that you could lose your home if the transfer is set aside. The cost of the Insolvency Act Indemnity Insurance policy is dependent on the market value of the property at the time of completion of the transfer of equity transaction.
Your property may be repossessed if you do not keep up repayments on your mortgage with Bank of Scotland.
Preparing the Transfer of Equity with a Bank of Scotland Mortgage
When it comes to preparing the the Land Registry documents your lawyer should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.
If Bank of Scotland is joining in the transfer to release someone from liability, put the release in the ‘additional provisions’ panel if someone is entering into a covenant relating to the charge, place it in the ‘additional provisions’ panel stamp duty land tax is not payable when there is no chargeable consideration for the transfer (Schedule 3, paragraph 1 of the Finance Act 2003). In the case of a transfer subject to a charge (even if the transfer is by way of gift) or if a property has been transferred for no value and there is an associated discharge, HMRC would view this as an assumption of an existing debt by the purchaser (Schedule 4, paragraph 8 of the Finance Act 2003) and stamp duty land tax may be payable
if you wish you may state in the ‘additional provisions’ panel that ‘This transfer is made subject to a charge dated… in favour of…’
On form AP1, your lawyer should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.
Content on this webpage is for general information and only applies to England and Wales. It does not constitute advice for members of the public who should contact their lawyer,mortgage broker, insurer and accountant for specific advice relating to transfer of equity. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.