Top seven questions relating to First Trust Bank transfer of equity

• I currently have a joint First Trust Bank mortgage with my step-brother and am investigating the option of him assuming responsibility for the outstanding mortgage and extracting myself from it, to enable me to purchase a place with my partner. The remaining mortgage is about 250k, and the property value is about 450k. Is this a transfer of equity? Is land tax involved?
• Online reading suggests that solicitors are more expensive than conveyancers when it comes to transfer of equity conveyancing. Am I better of using a conveyancer or a solicitor if I need to be transferring equity and simultaneously switching mortgage with First Trust Bank
• How and when do I pay the Stamp Duty Land Tax payable for the transfer of equity in my home in my name alone which is happening at the same time as a refinancing with First Trust Bank?
• What is the process for having a person removed off the deeds to a property where the home loan is with First Trust Bank
• Is it possible to transfer the equity held in my property with my First Trust Bank mortgage?
• Me and a friend got a joint mortgage with First Trust Bank on a house about a year ago. I am now thinking of purchasing a apartment on my own and my friend would like to buy me out. Once we have agreed an amount what happens next? Would there be any potential issue with First Trust Bank with him being solely liable for the total mortgage rather than only half of it?
• My current mortgage is with First Trust Bank. Can I transfer equity to someone under eighteen years old?

Questions that your conveyancing solicitor could ask in relation to your First Trust Bank Transfer of Equity

Caveats to be read in further to the above First Trust Bank 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 First Trust Bank conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold premises

Should the tenure of your property be leasehold, the lease may require 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.

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 situations, 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 First Trust Bank 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 First Trust Bank 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 the time of completion of the transfer of equity transaction.

Preparing the Transfer of Equity with a First Trust Bank 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 First Trust Bank 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.