Putting My Partner on the Deeds

vegasvicar

Hi there,
I am currently remortgaging our house & am putting my partner on the deeds.
This is our home.
We have chosen to hold the property on trust for ourselves as joint tenants.
Does this mean that any stamp duty would need to be paid?
Are there any other implications that I need to be aware of before signing this over?
Many thanks.

kingstreet

It doesn't matter if you go joint tenancy or tenants in common. If the figures put you in stamp duty territory, you pay stamp duty.

http://www.hmrc.gov.uk/sdlt/calculate/transfer-ownership.htm

The transfer of equity needs to be completed by a solicitor and will cost £350 to £500 with some lenders' "free-legals" solicitors not willing to take on a TofE, even if they will earn from it. So make the lender aware of the need for a solicitor who will do the TofE, before you apply.

manzanilla

In this situation, HMRC in their wisdom (haha) treat the 'consideration' as being HALF the mortgage amount, on the grounds that your partner is taking on half the mortgage. It's a baffling line of reasoning, but there it is. So that is the amount that you need to compare against the Stamp Duty threshholds to see what tax needs to be paid.

See this example quoted in the HMRC link given above:

Richard King is the owner of a property valued at £500,000. The equity amounts to £100,000 and there is an outstanding mortgage of £400,000.
Richard transfers half the property to his wife Liz when they marry and in turn she takes on half the mortgage of £200,000.
SDLT is charged on the amount paid for a property or the amount of 'consideration' given. By taking liability for the mortgage Liz has given 'consideration' of £200,000 for her share of the property and so SDLT is charged on that amount.
The amount of the equity is not included in the calculation as SDLT is only charged on the consideration given.
SDLT is charged at 1% on £200,000 so Liz will pay £2,000 SDLT and notify HMRC of the transfer by completing an SDLT return

.

vegasvicar

Thanks manzanilla.
Half the mortgage would be 67,500 so I assume therefore that there is no tax to pay?

manzanilla

Sounds like it to me!

But do read that HMRC link and see if there is any reason why it should not apply to you. It's not really possible to give tax advice over the internet (and you should distrust anyone who says they can), all we can do is talk about standard situations.