Questions and answers: Chelsea Building Society transfer of equity
- My mum died last January leaving a loan-free semi to me and my half brother 50:50. Having continues to reside at the premises, there was a condition in her will specifying that the housecould not be sold for 24 months after her passing so he could reside there for a specified time frame. He now says he would like to remain in the premises beyond the prescribed period. We have discussed a transfer of equity. Am I right in saying we should get a valuation then he'd get a mortgage in the traditional way to purchase my equity?
- I am filling out a Chelsea Building Society transfer of equity form and have arrived at the part concerning defaults etc. I do some debts that I have been reducing over a long period, in fact they have long since disappeared from my credit records. Am I obliged to set these out?
- What if my application doesn't meet Chelsea Building Society lending criteria for a transfer of equity?
- My fiance and I have equal shares in a buy to let. I am a top rate tax payer. Preferably I wish to do a transfer of equity to her sole name to mitigate tax on the letting income. Assuming Chelsea Building Society are fine with this the legal fees are inexpensive. What are the implications when we dispose of the property? As I would no longer be on the title documents would I lose my CGT relief.
- What should I be budgeting for when it comes to what solicitors costs are for a transfer of equity? I'm in the process of remortgaging - moving over to Chelsea Building Society - and have been quoted £350 plus VAT by Chelsea Building Society's approved conveyancer, Have I been over quoted?
- I currently have a joint Chelsea Building Society mortgage with my brother and am investigating the feasibility of him taking on the whole mortgage and subtracting myself from it, to enable me to purchase somewhere with my partner. The outstanding mortgage is in the region 200k, and the property value is about 450k. Is this a transfer of equity? Is land tax involved?
- Do I need legal representation when doing a transfer of equity where the home loan is to remain with Chelsea Building Society?
Examples of questions in a conveyancing solicitor form relating to Chelsea Building Society Transfer of Equity
If you are adding a person on to the title deeds how do you wish to hold the property? Please provide your instructions by completing and returning a“Joint Ownership Declaration” Questionnaire.
Would you like us to prepare Declaration of Trust. If so are you willing to incur the further fee (beyond the Transfer of Equity fee)?
Please provide the details of anyone to be removed from the title deeds?
Is it the case that one of the registered proprietors passed away? If so please provide us with a copy of the Death Certificate, Probate and a copy of the Will.
Will there be any consideration monies passing between the parties for the Transfer of Equity? Where this is the case, please state the amount and who is to receive what figure
Please give the name(s) and addresse(s) of anyone to be added to the title deeds?
General Advice to read in supplemental the above Chelsea Building Society transfer of equity Info :
Tax and Legal
There may be various tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the Chelsea Building Society conveyancing panel and accountant before transferring equity.
Transfer of Equity Conveyancing for Leasehold premises
If your property is leasehold, provisions in the lease may require that you obtain the consent of the landlord. If such conditions are not strictly observed you may be in breach of the lease. This could potentially result in 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 lawyer will check with Chelsea Building Society 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 Chelsea Building Society 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 valuation of the property at finalisation of the transfer of equity transaction.
Your property may be repossessed if you do not keep up repayments on your mortgage with Chelsea Building Society.
Preparing the Transfer of Equity with a Chelsea Building Society Mortgage
When it comes to preparing the the Land Registry documents your conveyancer should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.
If Chelsea Building Society 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 conveyancer 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.