Transfer ownership of property to my ex

Joisen

Hi,

Myself and my partner are separating and own theee properties.

One is a flat that we both live in and we own two houses which we rent out.

Instead of selling the properties I wondered if it is possible to transfer the ownership of the flat to my partner so he can continue to live in it and he transfer the ownership of one of the houses into my name?

We could then get our own mortgages etc.

All three properties are currently mortgaged in both our names.

Is this possible?????

Thanks

00ec25

by "partner" we will assume you are not legally married, so the question is how much tax do you want to pay and how does he want to pay ?

flat
obviously no CGT as it is the main home of each of you, but, as there is a mortgage, then SDLT will be due on half the value of the o/s mortgage upon transfer. Payable by him since he is the one receiving the flat

rental
you would be disposing of a property that is not your main home, therefore triggering CGT. As the person making the disposal, you would have to pay the CGT based upon the share you own. The transfer would have to use open market value, not the outstanding mortgage
SDLT would be due based on the value of the o/s mortgage

so you need to crunch the real numbers to see what is the cost for each of you once the respective tax relief is included

needless to say there will be conveyancing costs as well

G_M

Just to add to the above, you would obviously need the consent of the respective mortgage lenders, or you would need to pay off the mortgages and take out new ones (in the new owner's name).

Joisen

Hi,

Thanks so much for your help.

The flat - It is worth £400,000 and the outstanding mortgage is £200,000. Would I be right in saying this means around £1,500 would be payable for SDLT?

The house - It is worth £325,000 and the outstanding mortgage is £158,000.

In terms of calculating CGT is this the difference between the price paid and the current value?

We purchased the property for £247,000 and it is now worth £325,000. The total profit is £78,000 and half is £39,000 so CGT would be payable on this amount?

My earnings were 37,000 last year so am I right in saying my total earnings would be my salary plus half the profit on the property 37,000 + 39,000 and the CGT due would be £6,709 (£5,026 Taxed at 28% and £1,683 Taxed at 18%)?

Thanks for your help this is quite difficult to understand.