Hodge transfer of equity: q and a’s

• Hodge have just agreed I can take over the mortgage on my home. I have applied for a transfer of equity but is this a transfer of ownership at the Land Registry on top?
• What if my application doesn't meet Hodge lending criteria for a transfer of equity?
• Can I apply to borrow more money from Hodge as part of a Transfer of Equity?
• I am remortgaging my house in Heathfield does my lawyer have to be on the Hodge Conveyancing panel. The conveyancing also involves a transfer of equity.
• I am am in need of a conveyancer to undertake my transfer of equity. Hodge are dealing with the refinancing. I considered asking my financial adviser. I am lead to believe he may receive a kickback for recommending a firm, but also of benefit will be that he knows the conveyancing solicitor, has dealt with them before. Any flaws you see in this way of thinking?
• My wife and I equally own a BTL. I am a higher rate tax payer. Preferably I would like to do a transfer of equity to her sole name with a view to mitigate tax on the letting income. Assuming Hodge are happy with this the legal fees are inexpensive. However what happens when we sell? As I would no longer be on the title documents would I lose my CGT relief.
• My current home loan is with Hodge. Can I transfer equity to someone under 18 years old?

Questions that your lawyer is likely to ask about your Hodge Transfer of Equity

General Advice to read in supplemental the above Hodge transfer of equity information :

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 Hodge conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold titles

If your property is leasehold, provisions in 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 restrictions are not strictly observed you may be in breach 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 as a result of 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 Hodge 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 Hodge 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 market value of the property at finalisation of the transfer of equity conveyancing.

Preparing the Transfer of Equity with a Hodge Mortgage

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

If Hodge 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 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. 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.