Transfer of equity after separation, CGT&Stamp duty?

LegacyMum

Hi MSE friends, all advice very welcome.
My partner and I separated a year ago, thankfully amicably. We have a son age 12. Not married. I need advice on the costs I will incur by transferring the equity of our flat to him without any financial gain to me. I have my own house which I bought before meeting him, which we have lived in for the last 14yrs (except for 2 yrs when we bought and renovated the flat) : a summary and a few questions:

- We lived in the flat for 2 yrs 2013-2015
- He's been living therre since December 2022
- Value of flat £425,000/£450,000 Mortgage £155,000
- My ex is struggling to pay the mortgage, therefore I want to work though all my costs to transfer the equity - it looks complicated
- We have a mortgage as tenants in commom 50/50
- The mortgage is low, 1.2% runs out in March 2027, Virgin money, he's keen to keep the rate, understandably. The transfer needs to happen in the next 2 yrs as I need to remortage in 3 yrs. or move myself.
- I've not discussed with the mortgage company yet as he does not yet earn enough to take on the mortgage, due to earning multiples, although currently paying the mortgage - he will probably sell it.
- I'm currently on a sabbatical but a 40% tax payer. 

 Questions:
- Do I need to consult a lawyer and an accountant on the transfer of equity
- I need to understand how much it is going to cost - as I am asking for no financial gain.
- Am I liable for CGT, if so how much - I don't currently pay CGT
- Am I liable for Stamp duty, if so how much
- Is there a 'good' time to do this during the tax year, although we will be tied by his inability to take on the mortgage.
- Any other advice, questions I need to be asking, anything I have missed.

Huge thanks for all support, I realise this is a complicated area and I will need advice, but any way to minimise costs and be as prepared as possible would be helpful.

Thanks again.

SDLT_Geek

LegacyMum said:

Hi MSE friends, all advice very welcome.
My partner and I separated a year ago, thankfully amicably. We have a son age 12. Not married. I need advice on the costs I will incur by transferring the equity of our flat to him without any financial gain to me. I have my own house which I bought before meeting him, which we have lived in for the last 14yrs (except for 2 yrs when we bought and renovated the flat) : a summary and a few questions:

- We lived in the flat for 2 yrs 2013-2015
- He's been living therre since December 2022
- Value of flat £425,000/£450,000 Mortgage £155,000
- My ex is struggling to pay the mortgage, therefore I want to work though all my costs to transfer the equity - it looks complicated
- We have a mortgage as tenants in commom 50/50
- The mortgage is low, 1.2% runs out in March 2027, Virgin money, he's keen to keep the rate, understandably. The transfer needs to happen in the next 2 yrs as I need to remortage in 3 yrs. or move myself.
- I've not discussed with the mortgage company yet as he does not yet earn enough to take on the mortgage, due to earning multiples, although currently paying the mortgage - he will probably sell it.
- I'm currently on a sabbatical but a 40% tax payer. 

 Questions:
- Do I need to consult a lawyer and an accountant on the transfer of equity
- I need to understand how much it is going to cost - as I am asking for no financial gain.
- Am I liable for CGT, if so how much - I don't currently pay CGT
- Am I liable for Stamp duty, if so how much
- Is there a 'good' time to do this during the tax year, although we will be tied by his inability to take on the mortgage.
- Any other advice, questions I need to be asking, anything I have missed.

Huge thanks for all support, I realise this is a complicated area and I will need advice, but any way to minimise costs and be as prepared as possible would be helpful.

Thanks again.

If the property is in England the relevant stamp duty is Stamp Duty Land Tax.  But that is a tax paid by the person acquiring a property, so that is not you, but your ex.

I cannot see how you can go through with a transfer of equity, with you coming off the mortgage, if the lender will not accept him as the sole borrower.  Is it not better to leave things as they are until it is sold (you say it will probably be sold)?

user1977

If "he does not yet earn enough to take on the mortgage... - he will probably sell it" then surely you can't currently do the transfer of equity - and both of you selling the property makes more sense?

gwynlas

If he is struggling financially would he be open to renting a room unless of course your son stays with his dad regularly?