Sometimes you might want to change who owns your property without going through a traditional sale. For instance, you may decide to give part or all of your home to a child, or you might need to buy out an ex-partner after a separation.
This guide is written by Emma Bradbury, Head of Residential Conveyancing at Waldrons Solicitors. With over 25 years of experience helping people move home, Emma explains the process of transferring equity in a warm, straightforward way.
What is Transfer of Equity?
In simple terms, equity in a property means the share or value of the property that you own. Transferring equity refers to changing the ownership arrangements of that property by either transferring full ownership or a part of it to someone else. In other words, you are adding or removing someone from the property’s title deeds, which can result in either the entire property changing hands or just a portion of it.
Transferring equity is common in a variety of situations. Some common reasons for a transfer of equity include:
- Divorce or separation: Buying out an ex-partner after a divorce or separation (so one person keeps the home), often part of a financial settlement with help from your divorce solicitors.
- Gifting property: Gifting a property (or a share of it) to a family member, such as transferring your house to a child or grandchild as a gift.
- Adding a partner or spouse: Adding a new spouse, civil partner, or unmarried partner to the title deeds (for example, after marriage or moving in together, you might put your partner’s name on the property).
- Removing a name: Removing a co-owner’s name from the property (for example, if a joint owner wants to relinquish their share).
- Changing share in joint ownership: Adjusting how much each joint owner owns (one owner buying a larger share from another).
No matter the reason, the goal is to legally update the property’s ownership to reflect your new situation.
Full Transfer of Ownership
A full transfer of ownership means one person is relinquishing their entire ownership of the property to someone else. After a full transfer, the original owner is no longer on the title; the new owner holds 100% of the property.
You might opt for a full transfer if, for example, you are gifting the whole property to your adult child, or if you and your ex-partner are dividing assets and you decide one of you will take sole ownership of the house. In a divorce settlement, a full transfer could occur when one spouse signs over all of their interest in the house to the other spouse. Similarly, if an elderly parent transfers their home entirely to a family member, that’s a full transfer of equity.
Partial Transfer of Ownership
A partial transfer of ownership (part transfer of equity) means you are transferring only a share of the property to someone else or changing the shares if it’s jointly owned. At least one of the original owners stays on the title, but the ownership is now split.
Common scenarios for a partial transfer include adding someone to the property or adjusting shares between joint owners. For example, if you want to add your new partner or spouse to your home’s deeds, you will transfer a portion of the equity to them and you’d then own the property jointly. Another example is if you co-own a house with someone and one of you buys out part of the other’s share (but not the entire share). Many people after a separation will do a partial transfer: one partner keeps the property but buys out the other’s interest, rather than selling the house outright. In that case, one name comes off the deeds and the other remains as owner (often with a new mortgage in just their name).
How to Transfer Equity: Step-by-Step Process
Whether you are doing a full transfer or a partial transfer, the process of transferring equity follows the same basic steps in England and Wales. It’s important to get each step right to ensure the transfer is legally valid. Below is a step-by-step guide:
- Choose the correct legal form: For most transfers of equity, you will use HM Land Registry Form TR1 for transferring ownership of the whole registered property title: gov.uk. This is the form to transfer a whole property (even if you’re just adding someone alongside you). If you are only transferring part of the land (for example, splitting off part of a garden to a new owner), a different form called Form TP1 would be needed: gov.uk but this is uncommon for typical equity transfers.
- Verify identities (Form ID1): If any party in the transfer is not using a solicitor, they must prove their identity to HM Land Registry. This is done with an ID1 form (Certificate of Identity). Essentially, you (or the person coming onto or off the title) would have your identity documents certified, either by a solicitor or at the Land Registry office to ensure that the transfer is not fraudulent gov.uk. (If both sides have solicitors, they will handle ID checks and a separate ID1 form may not be needed in that case.)
- Calculate fees and check Stamp Duty: You’ll need to pay a fee to HM Land Registry for processing the transfer. The Land Registry fee depends on the value of the transaction (or is a nominal fee if it’s a gift with no money involved). You can find the correct fee on the HM Land Registry website gov.uk. Additionally, you will need to consider Stamp Duty Land Tax (SDLT) which is a tax on property transactions. If the person receiving equity takes on a mortgage or pays anything for the transfer, SDLT might be payable depending on the amounts. For example, transferring half of a property with a large outstanding mortgage could trigger Stamp Duty, even if no cash changes hands gov.uk. If any Stamp Duty is due, an SDLT return must be submitted to HMRC (and any tax paid) as part of the process, usually before or at the time you send the transfer to be registered. (If the transfer is a true gift with no mortgage and no money, typically no SDLT is payable gov.uk but always double-check current rules on the UK government’s SDLT guidance for transfers due to marriage, divorce or gifts etc.)
- Complete the AP1 form (application to change the register): An AP1 Form is the application to change the register at HM Land Registry. In plain terms, this is the form that officially notifies Land Registry of the change in ownership and asks them to update the title register. On the AP1, you (or your solicitor) will list all the documents you’re sending and details of the transaction. This form, together with the TR1 and any supporting documents, is what Land Registry uses to process the transfer. If the property you’re dealing with is unregistered, we can transfer on the unregistered land and then deal with the transfer together with a FR1 form.
- Submit the documents to HM Land Registry: Once you have completed the necessary forms, you need to send them to HM Land Registry for registration. This typically includes:
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- The TR1 transfer deed (signed by all current and new owners, and witnessed)
- The AP1 application form
- Any required ID1 forms for identity verification (if applicable)
- Proof of payment or reference for any SDLT return (if Stamp Duty was payable, you usually include the SDLT5 acknowledgement or reference number from HMRC)
- The correct Land Registry fee (cheque or proof of electronic payment, as required)
Make sure all documents are signed where needed (for example, the TR1 deed must be signed by the transferring parties and witnessed). Once the Land Registry receives and processes these, they will update the official title register to reflect the new ownership arrangement.
On the surface, these steps are straightforward and the fees are relatively low compared to an outright sale. In simple cases (e.g. gifting to a spouse with no mortgage), you might not need a solicitor as you can fill in the forms and send them off yourself. However, in practice the transfer process can become complicated due to a few factors:
- Mortgage involvement: If the property has an outstanding mortgage, you must inform your lender about the change in ownership. In fact, in most cases the lender’s approval is required before you can transfer equity. The lender may require you (and the new owner, if adding someone) to remortgage or refinance the loan in the new ownership names. They almost always insist that a conveyancing solicitor handles the transfer for you, this is to protect the lender’s interest. (From the lender’s perspective, they want to ensure the person remaining or being added can afford the mortgage, and that the legal paperwork is done correctly so their security isn’t affected.) So, if you have a mortgage, expect to involve both the bank and a solicitor early in the process.
- Leasehold properties: If your property is leasehold (for example, a flat), there will be extra steps when transferring equity. You’ll likely need to notify the freeholder or managing agent about the change of ownership, often by serving a Notice of Transfer once the transfer is complete. There might also be a fee payable to the freeholder/management company for registering the new owners. Always check the lease and get advice on the proper procedure to avoid breaching the lease terms.
- Tax implications beyond SDLT: While Stamp Duty Land Tax is the main tax to consider during a property transfer, also be mindful of Capital Gains Tax (CGT) or Inheritance Tax (IHT) in certain situations. For example, if you transfer a buy-to-let property or a second home to someone else, there could be CGT to pay on any increase in value. Gifting a property could have IHT implications later on if you pass away within a certain time. These taxes depend on personal circumstances and it’s wise to speak to an accountant or tax advisor if you think CGT or IHT might apply to your transfer. (At Waldrons, our conveyancers can advise on SDLT as part of the process, but for CGT or IHT you may need specialist tax advice and we can help to point you in the right direction)
- Accuracy and legal safety: Property transfer forms can be technical and any errors can cause delays or even rejection of your application. In worst cases, mistakes could affect your legal ownership. It’s important to fill in all names correctly, sign in the right places, and include all necessary documents. If you’re unsure, it’s safest to consult a qualified conveyancing solicitor. Remember that once the transfer is registered, it’s difficult to undo an error without significant hassle, so double-check everything or get professional help.
How Waldrons Can Help You
Transferring equity is essentially a legal exercise but it’s one that carries significant consequences if done incorrectly. While it is possible to handle a transfer of equity on your own, many people choose to instruct a solicitor to ensure everything is done by the book. Here at Waldrons, our specialist residential conveyancing team has the knowledge and expertise to guide you through every step of an equity transfer. We will:
- Provide tailored advice: We listen to your situation (e.g. divorce, gift, adding a partner) and explain your options in plain English. Every case is a bit different, and we make sure you understand what’s happening at each stage.
- Handle the paperwork: Our team will complete all the necessary forms (TR1, AP1, etc.) on your behalf, correctly and efficiently. We liaise with HM Land Registry and if applicable, HMRC for Stamp Duty, so nothing gets overlooked.
- Deal with third parties: If there’s a mortgage, we communicate with your lender to obtain consent and satisfy their requirements. For leasehold properties, we’ll handle the notices to freeholders or management companies. We coordinate all these moving parts.
- Ensure legal protection: By using Waldrons, you get the benefit of professional oversight. We make sure the transfer is legally binding and that your interests (and any lender’s interests) are protected. You’ll have the comfort of knowing nothing has been missed.
Transferring ownership of a home can touch on other areas of law too for example, it might be part of a divorce settlement or an estate plan. At Waldrons, we have a full range of services, so we can work in tandem with our family law colleagues or other specialists as needed to support you. Our aim is to make the process as smooth and stress-free for you as possible.
“Whether it’s due to a difficult separation or a happy life change, transferring equity is a big moment for anyone. My goal is to make the legal side as smooth and worry-free as possible, so you can focus on your next chapter.”
Emma Bradbury, Head of Residential Conveyancing at Waldrons Solicitors
If you’re considering a transfer of equity, feel free to contact us for guidance. We’re happy to discuss your circumstances and answer any questions you have. Getting early advice can save you time and prevent mistakes.
Here at Waldrons, our team of residential conveyancing solicitors has in-depth knowledge and expertise to guide you through every step of the equity transfer process. Instructing a conveyancing solicitor means that you are legally protected and gives you peace of mind that the process is completed properly. Get in touch today to discuss your circumstances.
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