DIY Transfer of Equity (Swap one of the joint names)

alicewilliams

Hiya.  Hope everyone is safe and well in these uncertain times.  I'm hoping someone can help me regarding Transfer of Equity questions.  Our situation is that my granddad and I currently jointly own our family home (freehold).  There is no mortgage outstanding as this was paid off a while ago.  I want to remove my name and replace it with my grandma's instead.  After contacting a number of solicitors, we're being quoted between £800 to over £1000 quotes.  Since there is no mortgage and there is no money involved - we just a simply want to remove one name and replace it with another and I feel disenchanted that we're possibly being ripped off for what should be a reasonably simple process.

I'd rather pay any money saved to my grandparents, hence I started looking into DIY Transfer of Equity on HM Land Registry and from what I have gathered, we need to complete the AP1 and TR1 forms and carry out an ID check. I just want your assistance in understanding anything that I should know that can help me complete this process.

Much appreciate your help.

canaldumidi

Correct. Forms AP1, TR1 & ID1. Fairly straightforward if your follow the guidance carefuly.

https://www.gov.uk/government/publications/registered-titles-whole-transfer-tr1

LR have even made the ID checks easier due to Covid.

https://www.gov.uk/government/publications/temporary-changes-to-hm-land-registrys-evidence-of-identity-requirements-pg67a

Is the property your main residence? If not, don't forget Capital Gains Tax on your 50%....

As its a gift to your grand mother, if you were to die within 7 years (subject to periodic reductions) it would remain within your Estate for Inheritance Tax purposes.

If it is your main residence (and remains so), it's a Gift With Reservation so will remain in your Estate for IHT beyond the 7 years.

Out of interest, what is the motivation, and do the benefits of achieving that motive (if indeed you do) outweigh any disadvanteges?

alicewilliams

Hi @canaldumidi - Thanks so much for your informative and helpful post.  Sorry, I'm going to try and reply backwards, lol.

Motivation: A number of years ago both grandparents originally owed the property and it was mortgaged.  Due to marital and grandma's health problems which as you can appreciate, I can't really go into, they're relationship broke down.  My grandma wanted out, so to avoid losing our family home, I ended up re-mortgaging with my grandad, thus releasing my grandma from stress of having to worry about a mortgage.  I only added my name and never put any money into it - The mortgage payments have always been paid by grandad and not me and eventually the small amount of mortgage was cleared.  My grandma still stayed at same house.  Over time, my grandma's health has got much better, they have resolved their differences and cleared any personal misunderstandings and have now got back together.  I am not interested in the property as I want to eventually go travelling around the world and simply want to hand it back to my grandparents to allow them to reconcile and me to move on. 

Residence: The property has been and is our main residence where our family reside and we don't have any other properties.  I take on board what you said about the IHT and I can safely ignore CGT.

ID Checks: From the link you send me, am I right in thinking that if a medical doctor, teacher or bank official were to verify our IDs, they would need to complete ID3 and not ID1??  Also does it have to be a bank official such as a bank manager or can it be someone who's worked as an employee of a bank?

Forms (AP1, TR1): Since there are three people involved (GRANDAD staying put, ME removing my name and GRANDMA adding her name as jointly with grandad), do all three of us need to individually complete each AP1, TR1 form?

Once again, thanks in advance for all the help.

 

TBG01

I feel disenchanted that we're possibly being ripped off for what should be a reasonably simple process.

Yet you're stumbling at the first hurdle and seeking free advice.

Not having a go, but this is another thread where someone comes in attempting DIY conveyancing, because they feel like it's simple enough when in reality they simply don't want to pay for the work done. 

canaldumidi

alicewilliams said:

Hi @canaldumidi - Thanks so much for your informative and helpful post.  Sorry, I'm going to try and reply backwards, lol.

Motivation: A number of years ago both grandparents originally owed the property and it was mortgaged.  Due to marital and grandma's health problems which as you can appreciate, I can't really go into, they're relationship broke down.  My grandma wanted out, so to avoid losing our family home, I ended up re-mortgaging with my grandad, thus releasing my grandma from stress of having to worry about a mortgage.  I only added my name and never put any money into it - The mortgage payments have always been paid by grandad and not me and eventually the small amount of mortgage was cleared.  My grandma still stayed at same house.  Over time, my grandma's health has got much better, they have resolved their differences and cleared any personal misunderstandings and have now got back together.  I am not interested in the property as I want to eventually go travelling around the world and simply want to hand it back to my grandparents to allow them to reconcile and me to move on. 

Residence: The property has been and is our main residence where our family reside and we don't have any other properties.  I take on board what you said about the IHT and I can safely ignore CGT.

ID Checks: From the link you send me, am I right in thinking that if a medical doctor, teacher or bank official were to verify our IDs, they would need to complete ID3 and not ID1??  Also does it have to be a bank official such as a bank manager or can it be someone who's worked as an employee of a bank?

Forms (AP1, TR1): Since there are three people involved (GRANDAD staying put, ME removing my name and GRANDMA adding her name as jointly with grandad), do all three of us need to individually complete each AP1, TR1 form?

Motivation:

a) I believe that when you remortgaged with grandad you became jointly liable for the mortgage at that time. Consequently you would have been subject to SDLT (if any) based on the size of the 'consideration' you paid (ie 50% of the mortgage). I'm no expert here but SDLT_Geek is. Did you/your solicitor submit a SDLT return to HMRC?

b) in 'handing back' the property you are giving her a Gift With Reservation as explained above (the reservation being that you be allowed to remain there as your main residence).

Residence

CGT - correct as it's your main residence.

ID checks

I've no experience so can only interpret the same guidance as you. Yes: "Use form ID3 for a private individual". To be on the safe side I would ask someone in the bank to verify, and stamp the form with the bank's stamp. You may find that only the manager can/is authorised to do this, but other employees may be authorised - ask! Asking a friend/neighbour who happens to work in a bank and writes 'bank clerk' or whatever may be accepted- or may not!

Forms.

No, you complete one of each form. Yes, all three need to sign the TR1, you and grandad as 'transferors', then grandma and grandad (again) as transferees'.

Sanctioned_Parts_List

I think I would be talking to a tax adviser first, and having conversations about estate planning, particularly with respect to possible future care fees which could see the house liquidated to pay for them. If left too late, this would be treated as a deliberate deprivation of assets, but if thought about sufficiently ahead of time, could make a very efficient transfer of wealth from an older generation to a younger generation without impacting the quality of life of either.

canaldumidi

TBG01 said:

I feel disenchanted that we're possibly being ripped off for what should be a reasonably simple process.

Yet you're stumbling at the first hurdle and seeking free advice.

Not having a go, but this is another thread where someone comes in attempting DIY conveyancing, because they feel like it's simple enough when in reality they simply don't want to pay for the work done.

It's a view, and arguably valid.

But this is a moneysaving site so giving free advice to others where they can safely save money is equally valid, or more so.

Unlike conveyancing a sale or purchase of an unknown property, from an unknown seller or buyer, the risks here are negligible.

Indeed the worst risk I foresee (feel free to correct me!) is that the forms are completed inaccurately or incompletely and are rejected by the LR and have to be re-submitted.

In most conveyances, there's a risk of paying for a property not owned by the seller. Or subject to hidden covenants, rent charges etc. As a seller, there's a risk of the money not arriving, perhaps due to lack of or ill-drawn-up contract or a scam.

Most (all?) of these risks are irrelevant here where the parties know/trust each other, no money is changing hands, and the property is well-known, indeed used to be owned by both the transferees!

alicewilliams

TBG01 said:

I feel disenchanted that we're possibly being ripped off for what should be a reasonably simple process.

Yet you're stumbling at the first hurdle and seeking free advice.

Not having a go, but this is another thread where someone comes in attempting DIY conveyancing, because they feel like it's simple enough when in reality they simply don't want to pay for the work done. 

I understand what your saying TBG01, but surely charging a ridiculous amount of £1000 is clearly a rip-off?  Even though this site is for providing free advice I'm not after free advice and I feel hurt that you think I'm just after freebies.  I thought this site was about people saving money - any advice that you give is voluntary and no one forces you to answer questions that users post.  Those that do help, I'm sure are greatly appreciated, because I certainly do thank those who put the effort to assit.  

As this site seems to have become a bashing ground for people like me asking any money-related questions I'll be withdrawing from asking further questions

I still just want to say a big thanks to canaldumidi for trying to assist me and I want to be clear that I really appreciate your help.

canaldumidi

alicewilliams said:

TBG01 said:

I feel disenchanted that we're possibly being ripped off for what should be a reasonably simple process.

Yet you're stumbling at the first hurdle and seeking free advice.

Not having a go, but this is another thread where someone comes in attempting DIY conveyancing, because they feel like it's simple enough when in reality they simply don't want to pay for the work done. 

As this site seems to have become a bashing ground for people like me asking any money-related questions I'll be withdrawing from asking further questions

Don't do that.

I believe TBG01's post was meant well. Conveyancing IS in most circumstances both a complex and very necessary process, with risks attached, which is why solicitors train for years. And given the sums involved, it does normally make sense for most people to pay for their professonal services.

And I would normally support TBG01's advice that it is not moneysaving to forgo those services, especially as you have indeed as he says 'fallen at the first hurdle'.

But your situation is not the run of the mill scenario we see often here, hence my disagreement with him.

On a site like this you will always get a range of views, and a range or reactions. Disagreeing with or disliking some of them is not a reason to stop seeking help. Assess each response dispassionately, and then ignore or follow the advice as seems best.

Sanctioned_Parts_List

alicewilliams said:

but surely charging a ridiculous amount of £1000 is clearly a rip-off?  

For comparison, my remortgage with transfer of equity to spouse completed last year cost £772. I would expect the transfer of equity without remortgage to be slightly cheaper, but wouldn't like to guess by how much. Possibly your local solicitors are just expensive, and you may need to look further afield.