Common questions relating to Cumberland Building Society transfer of equity

• I currently have a joint Cumberland Building Society mortgage with my brother and am investigating the option of him assuming responsibility for the outstanding mortgage and removing myself from it, to enable me to purchase somewhere with my soon-to-be-wife. The outstanding mortgage is in the region 250k, and the property value is in the region 600k. Is this a transfer of equity? Is land tax payable?
• Am I best advised stop the direct debit for my mortgage with Cumberland Building Society as soon as a date for my remortgage and transfer of equity has been agreed?
• What can I do where I am unhappy with the conveyancer who undertook our transfer of equity conveyancing?
• Cumberland Building Society have just agreed I can take over the home loan on my home. I previously applied for a transfer of equity but presumably there is a transfer of ownership of the house on top?
• How and when do I incur the Stamp Duty Land Tax chargeable for the transfer of equity in my home in my sole name which is taking place simultaneously with a remortgage via Cumberland Building Society?
• I am trying to find a conveyancer to deal with my transfer of equity. Cumberland Building Society are dealing with the remortgage. I considered asking my mortgage broker. I understand he will likely get a referral fee for recommending a firm, but also of benefit will be that he knows the conveyancer, has dealt with them before. Is my logic flawed?
• Is stamp duty payable when it comes to an transfer of equity with a mortgage with Cumberland Building Society?

Questions that your conveyancer may ask in relation to your Cumberland Building Society Transfer of Equity

General Advice to read in conjunction with the above Cumberland 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 Cumberland Building Society conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold properties

If your property is leasehold, the lease may have a requirement for notices to be served and that you have a license to do so from the landlord. If such terms are not adhered to you may be in breach of the lease. This could potentially result in the freeholder taking enforcement action against you.

Indemnity Insurance

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 conveyancer will check with Cumberland 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 Cumberland 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 market value of the property at the time of completion of the transfer of equity transaction.

Preparing the Transfer of Equity with a Cumberland 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 Cumberland 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 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 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. Lender Panel.com Ltd will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.