Questions and answers: Scottish Building Society transfer of equity
- My friend and I got a joint mortgage with Scottish Building Society on a apartment in 2013. I am now looking to get a property on my own and my friend would like to buy me out. Assuming we can agree an amount what are the next steps? Is there likely to be any issue with Scottish Building Society with him being solely liable for the total loan rather than only part of it?
- Have recently separated from my ex of 18 years. I'm now living with my mum and dad and she wishes to remain in the flat and buy me out. What portion am I entitled to. Is it half of the equity after paying off the mortgage with Scottish Building Society? I assume proper valuations are required but I really need to be confident that I'm getting the best deal
- I bought a flat with a friend five.seven years ago Since buying the property, we have both got married. We are now intending to do a transfer of equity so my name is removed the Scottish Building Society mortgage. There is a 40k difference between the value the lender hold and what the property would sell for currently. Can you offer any advice?
- Me and my partner jointly own a house in Littleborough
. Home loan is with Scottish Building Society. I would like to transfer full ownership to him with no payment of money but without using a conveyancer. Is this likely to be simple?
- I jointly own a property in Wakefield
, with a Scottish Building Society loan with my former partner. Him and his fiance are going to buy me out. We had the go ahead from Scottish Building Society to replace my name with hers. The transfer of equity needs to be completed by a lawyer for Scottish Building Society (supposedly). Is it possible for us to do the Land Registry change?
- My wife and I jointly own a investment property. I am a higher rate tax payer. Preferably I would like to complete a transfer of equity into her name in order reduce our tax on rental income. Assuming Scottish Building Society are fine with this the legal fees are not high. However what happens when we sell? As I would no longer be on the title documents would I lose my CGT relief.
- Is stamp duty payable when it comes to an transfer of equity with a mortgage with Scottish Building Society?
Sample of questions in a lawyer questionnaire relating to Scottish Building Society Transfer of Equity
Please confirm the person to be removed from the title deeds will not reside at the property after completion of the Transfer of Equity?
Please give the name(s) and addresse(s) of anyone who jointly owns the property with you?
Please give the name(s) and addresse(s) of anyone to be extracted from the title deeds?
Has consent been obtained from Scottish Building Society to the proposed transfer of equity?
Please list all persons who occupy the property, their respective ages and relationships to you.
Where you are going to hold the property as beneficial Tenants in Common in unequal shares, what is the split to be. For e.g. 50-50, or 60-40?
General Advice to read in conjunction with the above Scottish Building Society transfer of equity Advice :
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 Scottish Building Society conveyancing panel and accountant before transferring equity.
Transfer of Equity Conveyancing for Leasehold titles
Should the tenure of your property be leasehold, 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 conditions are not strictly observed 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 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 lawyer will check with Scottish 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 Scottish 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 is dependent on the valuation of the property at finalisation of the transfer of equity transaction.
Your property may be repossessed if you do not keep up repayments on your mortgage with Scottish Building Society.
Preparing the Transfer of Equity with a Scottish Building Society Mortgage
When it comes to preparing the the Land Registry documents your conveyancing solicitor should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.
If Scottish 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 conveyancing solicitor 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.