First Direct transfer of equity: q and a’s

• Have recently separated from my ex of 18 years. I'm now living with my parents again and she wants to remain in the property and buy me out. What portion am I entitled to. Is it 50% of the equity after discharging the mortgage with First Direct? I assume proper valuations are necessary but I really need to be confident that I'm getting I am not being taken advantage of
• I currently have a joint First Direct mortgage with my step-brother and am looking into the option of him assuming responsibility for the whole mortgage and extracting myself from it, to enable me to buy somewhere with my soon-to-be-wife. The outstanding mortgage is in the region 300k, and the property value is about 600k. Is this a transfer of equity? Is land tax payable?
• My wife and myself have 50:50 shares in a BTL. I am a higher rate tax payer. Preferably I would like to do a transfer of equity into her name in order mitigate tax on the letting income. Assuming First Direct are content with this the legal fees are not prohibitive. What are the implications when we sell? Would my GGT relief be lost.
• My divorce has gone through as is the consent order. Now I must sort out the transfer of equity for the property and the First Direct mortgage. I have called First Direct for the transfer of equity application. What happens next?
• 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 First Direct - and have been quoted £250 including VAT by First Direct's approved lawyer, Have I been over quoted?
• The mortgage broker has recommended their lawyer for the Transfer of Equity plus remortgage with First Direct - Is it not simpler advisable to just instruct them?
• My current home loan is with First Direct. Can I transfer equity to someone less than eighteen years old?

Sample of information requested in a conveyancer form relating to First Direct Transfer of Equity

General Advice to read in supplemental the above First Direct transfer of equity Questions and Answers :

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 Direct conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold titles

Should the tenure of your property be leasehold, provisions in the lease may have a requirement for notices to be served and that you obtain the consent of the freeholder. If such restrictions 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 Direct 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 Direct 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 the time of completion of the transfer of equity conveyancing.

Preparing the Transfer of Equity with a First Direct 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 Direct 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 provided 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. 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.