Chesham Building Society transfer of equity: q and a’s

• Me and a friend got a joint mortgage with Chesham Building Society on a apartment about a year ago. I am now looking to get a apartment by myself and my friend would like to buy me out. Assuming we can agree an amount where do we go? Is there likely to be any problem with Chesham Building Society with him being solely liable for the total loan rather than only half of it?
• I am filling out a Chesham Building Society transfer of equity form and have arrived at the section regarding debts etc. There are some debts that I have been reducing for a number of years, in fact they no longer remain my credit rating. Do I need to declare these?
• I currently have a joint Chesham Building Society mortgage with my brother and am looking into the feasibility of him assuming responsibility for the whole mortgage and removing myself from it, so as to enable me to purchase a property with my soon-to-be-wife. The remaining mortgage is in the region 175k, and the property value is approx 500k. Is this a transfer of equity? Is stamp duty payable?
• My current home loan is with Chesham Building Society. Can I transfer equity to someone less than 18 years old?
• At what stage do I incur stamp duty chargeable for the transfer of equity in my property in my sole name which is happening simultaneously with a refinancing with Chesham Building Society?
• When it comes to transfer of equity conveyancing involving a remortgage with Chesham Building Society should I be invoiced VAT on the following: (1) HMLR fee on the transfer of equity (2) Pre - completion search fee (3) SDLT E submission on the transfer (4) Bank TT fee
• Chesham Building Society have today agreed I can take over the home loan on the flat. I had applied for a transfer of equity but presumably there is a transfer of ownership of the title deeds as well?

Examples of information requested in a conveyancer questionnaire concerning a Chesham Building Society Transfer of Equity

Information to consider in conjunction with the above Chesham Building Society 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 Chesham Building Society conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold properties

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 terms are not adhered to you may be in breach of the lease. This could trigger the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made as a result of 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 Chesham 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 Chesham 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 varies based on the valuation of the property at finalisation of the transfer of equity conveyancing.

Preparing the Transfer of Equity with a Chesham Building Society Mortgage

When it comes to preparing the the Land Registry documents your conveyancing solicitor should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.

If Chesham 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.

Information contained within this webpage is for general information and only applies to England and Wales. It should not be regarded as 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.