Removal of Form A Restriction from Title Register

Cornwall_SaleQuery

Hi,

We are trying to dispose of a residential property which, for CGT reasons, we transferred solely to my wife’s name. The sale is imminent.

That transfer has been effected, but the buyer’s solicitors have noted a restriction within the Reg of Title they say prohibits the sale. It seems to be a standard restriction that was probably put in place by HMLR when the property was owned by us jointly and was mortgaged:

 Restriction: No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.

I found a HMLR para that implies the restriction may/should be removed automatically so it could be a timing difference, but I am now wondering whether we need to apply to them to do so?

My basic Google search suggests that my wife may need to submit a RX3 form accompanied by a ST5 form.

Does anyone know if this is correct or how to proceed?

Many Thanks

SDLT_Geek

Cornwall_SaleQuery said:

Hi,

We are trying to dispose of a residential property which, for CGT reasons, we transferred solely to my wife’s name. The sale is imminent.

That transfer has been effected, but the buyer’s solicitors have noted a restriction within the Reg of Title they say prohibits the sale. It seems to be a standard restriction that was probably put in place by HMLR when the property was owned by us jointly and was mortgaged:

 Restriction: No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.

I found a HMLR para that implies the restriction may/should be removed automatically so it could be a timing difference, but I am now wondering whether we need to apply to them to do so?

My basic Google search suggests that my wife may need to submit a RX3 form accompanied by a ST5 form.

Does anyone know if this is correct or how to proceed?

Many Thanks

The usual way to proceed is for the transfer to appoint a second trustee, so as to comply with the Form A restriction.  The Land Registry would then automatically remove it.  (Though one might go on for the new buyers, if they hold as tenants in common).

It does not sound too late to amend the transfer and sign it again, as you say "the sale is imminent".

Cornwall_SaleQuery

Thanks, will HMLR accept the RX3 and ST5 form signed by both myself and wife requesting the charge is removed if we state the charge is no longer applicable as by mutual agreement, we have transferred it solely to her name? (Providing our consent forms to the change in title we have already sent to HMLR) I'm nervous that I would need to be added as a trustee, then we are jointly selling the property again and will be subject to higher CGT (I am a higher rate tax payer). The rationale was to keep wife as sole seller as she is a basic rate tax payer. I guess we should have removed the charge prior to transferring ownership!

Much appreciated