Dividing the plot into two and selling both

V_Cooper

Hello, having tried to sell our place as a single plot, we found 2 buyers, one wants the house and garden, and one wants the yard and barn. Even with paying the CGTax we will still be better off than the offers we've had as a single plot.

Can someone explain the legal process to split one Title Deed into two. A surveyor is drawing up the plans for both parties. Legals will be done by our solicitor, but does anyone know if the two new Title Deeds need to be registered with the Land Registry beforehand, (and how long does this take?) OR if it can be done at exchange/completion. I've tried looking at the LR site, and there seems to be a Transfer Form, not sure if it's the right thing though. Just really trying to see how long all this will take as the property we want to move to (and have done all surveys/searches/legals for) is pushing for about 6 weeks' time. Both parties that want to buy will get their mortgages through in maximum of 3 weeks and have done all the surveys & searches etc, so it should just be a question of the legal splitting of the title. Thanks.

onthemend

Hi

Why dont you sell off the barn and yard first, no CGT will be paid. Then sell off your house second, no CGT as this is your primary residence.

your solicitor should be able to re-register the 2 parcels of land , as soon as you have the new conveyance plans from surveyor.

I did this a couple of years ago when we sold off a part of our land, and then sold the house later

eddddy

onthemend wrote: »

Hi

Why dont you sell off the barn and yard first, no CGT will be paid. Then sell off your house second, no CGT as this is your primary residence.

your solicitor should be able to re-register the 2 parcels of land , as soon as you have the new conveyance plans from surveyor.

I did this a couple of years ago when we sold off a part of our land, and then sold the house later

Tax law is a bit pedantic in this area.

It sounds like you probably sold part of your 'garden and grounds'.

So to quote tax law, you sold "land which he has for his own occupation and enjoyment with that residence as its garden or grounds up to the permitted area". So you didn't have to pay CGT.

But there can be arguments about the definition of 'garden or grounds'

HMRC's guidance (which is not law) suggests the following:

Garden or grounds
You’re entitled to relief if you dispose of land that you occupy as your garden or grounds, up to the permitted area, at the time of your disposal. The garden or grounds includes the buildings standing on that land. So a building that is not part of your dwelling house can still qualify for relief if it’s within the permitted area of garden or grounds.

The garden or grounds will include any enclosed land surrounding or attached to your dwelling house and serving chiefly for ornament or recreation....

Link: https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2019

So the OP needs to determine whether their barn and yard fall into the definition of 'garden and grounds'.

V_Cooper

Sorry, everyone is misunderstanding/misreading my question. Leaving the CGTax to one side completely, I just wanted to know if:

Someone can explain the legal process to split one Title Deed into two, ie what does the solicitor actually do, and how long does it take.

G_M

I believe I read that the owner of a single Title cannot convert it into 2 separate Titles, each of which he remains the owner of. I may be wrong though.

The normal process would be to sell ( or give away) part of the land and at that point

* a new Title would be created for the sold land and
* the remaining land would be re-defined to exclude the land sold

This is done via Land Registry form TP1 (Transfer of Part).

A survey is likely to be needed, so that the Plans for both Titles can be clearly drawn, and registered.

https://www.gov.uk/government/publications/registered-titles-part-transfer-tp1

da_rule

Is the property registered at the Land Registry?

If so, there are two options:

1) Apply to the Land Registry (with the plan) and ask them to split the title. They are very busy and they do not have to entertain such an application so it would depend on why you want it done. There are also issues in doing this if you have a mortgage secured on the property as the charge would either need to be released from one part or varied to apply to both of the new parts.

2) Your solicitor will simply treat the transactions as 'sales of part'. They will use form TP1 (one for each buyer), with relevant plans attached. The Land Registry will then split the title when the transfers are registered and issue new title documents to the new owners.

Option 2 is probably easier and quicker (and also saves you having to pay the Land Registry fee).

If your property isn't registered you could apply for voluntary first registration and ask the Land Registry to register the two parcels separately (again, they do not have to and the mortgage issue still applies). Or you could again just use a TP1, your solicitor would deduce title to both buyers using your deeds, and the buyers would register the transfers and the land.

V_Cooper

Option 2, as there is fortunately no mortgage. The surveyor for splitting the plot reckoned that the two buyers' solicitors apply for new Title Deeds, taking about 3 or 4 weeks. This doesn't seem correct as my own solicitor holds our Deeds for the whole plot, so would surely use TP1 and Transfer Part of the whole plot into two separate Titles on exchange?