Transfer of ownership/equity to sibling

Sarahwrig

Hi,

Apologies if this question has been asked previously. After searching through the threads I could not find an answer that fits my particular query.

I bought a house jointly with my brother some 11 years ago since he wouldn’t have been able to get the mortgage in his name only due to affordability. I then moved out and bought my own house about 4 years ago. My brother has been paying the mortgage in full throughout the years and has been responsible for the house. I did live there until buying my own house but as a lodger. I paid the mortgage from my account with him paying me back for that amount.

I now want to move again and need my name taken off his mortgage so as to increase the amount on my own mortgage. My brother’s house is worth around £250k with £100k mortgage outstanding. I want to transfer my share of the house over to him and for him to take over the mortgage, which now fits his affordability. I do not want any money in return.

My question is: how would this process be treated in terms of stamp duty and capital gains taxes. I am not selling or profiting, there is a mortgage involved and the property has probably increased in value by 35k.

Thanks for advice.

G_M

Sarahwrig wrote: »

I bought a house jointly with my brother some 11 years ago since he wouldn’t have been able to get the mortgage in his name only due to affordability. I then moved out and bought my own house about 4 years ago. My brother has been paying the mortgage in full throughout the years and has been responsible for the house. I did live there until buying my own house but as a lodger. I paid the mortgage from my account with him paying me back for that amount.you were a joint owner- not a lodger.

I now want to move again and need my name taken off his mortgage so as to increase the amount on my own mortgage. My brother’s house is worth around £250k with £100k mortgage outstanding. I want to transfer my share of the house over to him and for him to take over the mortgage, which now fits his affordability. I do not want any money in return.
Either
* the current mortgage lender will need to agree to your name being removed, leaving him as sole mortgage borrower, or
* the current mortgage will need to be paid off and and a new mortgage applied for in his sole name


My question is: how would this process be treated in terms of stamp duty and capital gains taxes. I am not selling or profiting, there is a mortgage involved and the property has probably increased in value by 35k.

Thanks for advice.

SDLT is based on the transfer value. In this case, it is I believe the joint outstanding mortgage so 50% of £100 = £50K

Capital Gains Tax is based on the time you lived there Vs the time it was not your main home.
https://www.gov.uk/tax-sell-property


https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64200c

Sarahwrig

Thanks for that. So to check my understanding......SDLT is based on my half of outstanding mortgage(£50k) and not on my owned half being transferred (£75k)? In either case, would he be liable to pay SDLT or is the amount too low to warrant SDLT payment?

Also, the point about CGT, would CGT be payable on how much the property had increased in value while I lived there? How would I work out that increase? I’m a little confused about that one.

Thanks in advance.

SDLT_Geek

I suggest you go back a step. What is your share in the underlying ownership of your brother's house. Do you have a half share?

Or perhaps you have no beneficial ownership at all, just being on the title and liable for the mortgage? That would be consistent with a few of the things you said.

What does the transfer made to the two of you say on this subject? Is there a declaration of trust?