Re-mortgage, transfer of equity, potential CGT?

Guillemot_Undecided

Hello everybody. I’m hoping somebody may be able to provide me with little advice.

Here’s the scenario:

Mortgage and title deeds on my main residence are in my name. 

My partner (we’re not married or in a civil partnership) has moved in with me and she wants to use her savings to clear the outstanding mortgage (£100k) and become part owner of the property (we would get a declaration of trust drawn-up re: equity split etc).

What is the best way to go about making this happen? Are there any tax implications regarding transfer of equity, CGT, stamp duty etc?

Thanks in advance! Looking forward to your advice.

SDLT_Geek

Guillemot_Undecided said:

Hello everybody. I’m hoping somebody may be able to provide me with little advice.

Here’s the scenario:

Mortgage and title deeds on my main residence are in my name. 

My partner (we’re not married or in a civil partnership) has moved in with me and she wants to use her savings to clear the outstanding mortgage (£100k) and become part owner of the property (we would get a declaration of trust drawn-up re: equity split etc).

What is the best way to go about making this happen? Are there any tax implications regarding transfer of equity, CGT, stamp duty etc?

Thanks in advance! Looking forward to your advice.

Assuming the property is in England there could be stamp duty land tax to pay if your partner has an interest in another property.

Guillemot_Undecided

Thank you.

I guess the other part of the question is- will there be any CGT implications?

My intention was to remortgage to add my partner to the mortgage (so we would have a tenants-in-common mortgage (we are not married)) and complete a transfer of equity to my partner (25% equity in the property), despite the fact at that point, she will have not contributed to mortgage payments etc. Would the transfer of equity effectively be seen as ‘gifting’ her 25% of the property, hence potential CGT implications?
The next step from there would have been for her to pay off her 25% share in the property from her saving, hence clearing the mortgage.