Questions and answers: Legal & General Home Finance transfer of equity
- After 2 a couple of years separated I have decided to transfer my interest in our flat to my husband who is refinancing with Legal & General Home Finance. Can a transfer of equity be completed inside four weeks?
- I am disposing of my equity in flat in Hendon to my co-owners husband, they are sticking with Legal & General Home Finance being the the existing mortgage company. We are haggling as to who must pay the charges for the transfer of equity. Is this normally shared or is one party liable for the legal bill?
- How and when do I incur stamp duty due for the transfer of equity in my house in my name alone which is happening at the same time as a switching mortgage with Legal & General Home Finance?
- I am trying to find a conveyancer to deal with my transfer of equity. Legal & General Home Finance are dealing with the remortgage. I thought of asking my mortgage broker. I am lead to believe he may receive a kickback for suggesting a firm, but also of benefit will be that he knows the conveyancing solicitor, has a working relationship with them. Is my logic flawed?
- Is stamp duty payable when it comes to an transfer of equity with a mortgage with Legal & General Home Finance?
- What if my application doesn't meet Legal & General Home Finance lending criteria for a transfer of equity?
- My fiance and myself have 50:50 shares in a investment property. I am a higher rate tax payer. Ideally I wish to do a transfer of equity into her name with a view to reduce our tax on rental income. Assuming Legal & General Home Finance are fine with this the legal fees are inexpensive. What are the implications when we dispose of the property? Would my GGT relief be lost.
Sample of questions in a lawyer form concerning a Legal & General Home Finance Transfer of Equity
Please list all persons who occupy the property, their respective ages and relationships to you.
Who will be responsible for the costs of the Transfer of Equity?
Where you are intent on holding the property as beneficial Tenants in Common in unequal shares, what is the split to be. For e.g. 50-50, or 60-40?
Please provide the name(s) and addresse(s) of anyone to be extracted from the property title?
Is the transfer of equity subject to a court order? If yes please supply a copy
Please confirm whether you are receiving any payment as part of the Transfer or Equity and from whom and give details of the amount?
Important warnings to consider in supplemental the above Legal & General Home Finance 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 Legal & General Home Finance conveyancing panel and accountant before transferring equity.
Transfer of Equity Conveyancing for Leasehold properties
If your property is 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 terms are not adhered to you may be in breach of your covenants under the lease. This could potentially result in the freeholder taking enforcement action against you.
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 lawyer will check with Legal & General Home Finance 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 Legal & General Home Finance 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.
If you do not keep up the payments on your mortgage with Legal & General Home Finance your property may be repossessed.
Preparing the Transfer of Equity with a Legal & General Home Finance 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 Legal & General Home Finance 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.
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.