Transfer 1/2 share

AuntyJean

My partner & I bought a holiday chalet/house in 2001 with a mortgage on the property where we live.

It's a long story but the short of it is my partner owes me a substantial amount of money which he has borrowed over the years.

Rather than sell the holiday home I would like to get it transferred solely into my name to wipe out the debt my partner owes.

We each own a 50% share (not jointly owned). How easy would it be for us to transfer his share over to me? When we bought it we did not use a solicitor or estate agent. We were simply sent a transfer form and I think for TP1 would be all I need? What would be the cost?

Bossyboots

You have other issues here, rather than just cost.

Firstly, you can do it yourselves using a TR1 downloaded from the Land Registry website. You would have a registration fee to pay when you send it to the land registry. You also need to check whether stamp duty is payable on the transaction.

You will be increasing your future capital gains tax liability on sale if you take on his share as well, unless you plan for this property to become your principal residence in years to come.

You would also be wise to ensure there is paperwork showing that he is passing you his share to pay off a debt to you, otherwise if he dies within seven years of the transaction the share passed to you will be treated as a gift and subject to inheritance tax accordingly if his estate is large enough. There may also be the question of whether he disposed of an asset to avoid care home fees. I would suggest you therefore need an agreement drawn up and witnessed by a solicitor evidencing the fact that this share of the property is to repay you, not a gift. Money spent on this now could save you a lot later on.

lotto-dreamer

I agree, you need a solicitor.

Not only could there be stamp duty tax implications, depending on value of property –but potential consequences if your partner were to go bankrupt within a certain number of years after the transfer (could be construed as him trying to offload his assets) You should get legal advice to avoid future repercussions.

The form for transferring equity would be a TR1 and I think registration at Land Registry is about £40 (for simply changing the register into your sole name) - but there are definitely other implications which need to be dealt with before doing this.

AuntyJean

lotto-dreamer wrote:

I agree, you need a solicitor.

Not only could there be stamp duty tax implications, depending on value of property –but potential consequences if your partner were to go bankrupt within a certain number of years after the transfer (could be construed as him trying to offload his assets) You should get legal advice to avoid future repercussions.

Thanks for the advice. However, as I am unlikely to get back anything at all otherwise and I will be responsible for the full mortgage (£30,000) if he is made bankrupt and is forced to sell the house, I think I may take the chance.

Would it be a better option to state on the form that 'the transferor has received ......the sum of.......' but without any money actually changing hands?

PS property value only £65,000

Bossyboots

AuntyJean wrote:

Thanks for the advice. However, as I am unlikely to get back anything at all otherwise and I will be responsible for the full mortgage (£30,000) if he is made bankrupt and is forced to sell the house, I think I may take the chance.

Would it be a better option to state on the form that 'the transferor has received ......the sum of.......' but without any money actually changing hands?

PS property value only £65,000

If he is transferring his share to pay off his debt to you, then presumably no money is changing hands. This won't affect stamp duty as it is based on the transaction value and on the property in question you should be okay anyway as far as that is concerned.

If you have an agreement drawn up that the share of the property is to repay his debt to you, then you would be able to produce that in the light of any bankruptcy as evidence that he was not merely disposing of an asset, but repaying a debt. The issue that might be taken is that you would not be considered a priorty debt but as you already owned half the property it may not be such a problem.