Transfer of Equity, what Land Registry charges?

Trying_to_be_good

Hello everyone

I'm trying to buy my OH out of our house as part of our divorce. I have a DIP from our lender, and the full application has gone in today.

My solicitor has quoted me £400+VAT for their fees to act on my behalf and the lender's behalf.

My understanding is there's no stamp duty (land tax) to pay as it's part of our divorce, albeit without a court order as we're negotiating between ourselves.

She's also quoted me a huge £540 Land Registry fee, plus the £6 for office copies.

Is this right? The house value is >£500k, the outstanding mortgage is just under £200k (so if we assume half is his that's just under £100k) and the cash element is likely to be in the region of £25k-£30k.

I'm struggling to understand which scale on the Land Registry leaflet applies to the transaction (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/331610/REGSERVFees_3_2014.pdf) and why a transfer of equity, i.e. a part transfer, looks to cost far more than a transfer of the whole.

Many thanks for any help

Land_Registry

If the Transfer is effectively from 2 to 1 with an existing mortgage in place but no consideration (no monies changing hands) then the registration fee would normally be assessed under Scale 2 on half the value of the equity, namely current value less mortgage divided by two.

The £540 quoted is a Scale 1 registration fee so worth double-checking understanding with the solicitor

The reference guide you links to sets out the Scale 1 and 2 fees amongst others but not too sure which part you are referring to for a comparison.
You are really looking at a Transfers of a registered estate not for value here although the 'cash element' is likely to need clarifying as to whether that is also being included in calculating the equity and therefore the final value of the share being transfrred

Trying_to_be_good

Thank you. It is 2 names into 1 of those names, a mortgaged property so also changing the mortgage to one name.

Are you saying that if there's no cash transfer, it's a different charge than of there is a Cash transfer? And if so, is the charge dependent on the amount of the cash changing jams, the overall value of the property, or something else?

At the moment the property is split 75% me and 25% OH, with me looking to take on the whole 100%.

I'm concerned my solicitor has given me incorrect info on the charge, but I'd like to go back to her with my facts checked rather than the suspicion it might be wrong.

Many thanks

Trying_to_be_good

Please, any info on what the charge should or could be? I'm hoping my solicitor is wrong, I think she is but would like some confirmation.

Thank you

Land_Registry

If the Transfer is from 2 to 1 and for nil consideration then the fee is assessed on half the value of the equity - we make no account for who holds what share when calculating the registration fee. As such it would be based on Equity divided by 2

If the Transfer was for a monetary amount e.g. In consideration of £20k then the registration fee will invariably be assessed on that amount and under a different scale , namely Scale 1. It is rare for the Transfer to be completed in this way in the circumstances you have described.

I think you will find that if you ask your solicitor to check and confirm the registration fee they will be able to explain it for you and if wrong the question will alert them to that fact

Trying_to_be_good

Thank you, I will let you know how I get on.