How To Transfer Property Ownership

A transfer of equity is the formal name for changing who legally owns a property when the property itself is not being sold on the open market. Typical scenarios include:

• ●Adding a partner to the title after marriage or moving in together
• ●Removing an ex partner after divorce or separation
• ●Gifting a property or a share to a family member
• ●Restructuring ownership for inheritance tax planning
• ●Buying out a co owner
• ●Adding or removing a name following a death

The legal work is broadly the same in each case, but the tax and mortgage consequences vary significantly.

Both parties to the transfer need legal representation. In a straightforward family transfer this can sometimes be the same firm if there is no conflict of interest. In a divorce or contested transfer, each party needs their own solicitor.

The conveyancer opens a file, runs identity and anti money laundering checks, requests the official title from HM Land Registry, and asks both parties for the practical details of the transfer.

If the property has a mortgage, the lender must consent to the change of ownership. The lender will reassess affordability if a new person is being added, or release the outgoing party if someone is being removed. Most high street lenders charge an administration fee of £100 to £300 for processing the consent. If the lender refuses to consent, the property must be remortgaged at the same time as the transfer, which adds complexity and cost.

The TR1 form is the official Land Registry document that records the change of ownership. It captures who is transferring (the transferor), who is receiving (the transferee), the property title number, any consideration paid, and any restrictions to be entered on the new title. Both parties sign the TR1 in front of a witness.

SDLT may apply even when no money is changing hands. The general rule is that SDLT is calculated on the consideration, which includes any cash paid plus any mortgage debt the transferee is taking on. A simple example: if you transfer a property worth £400,000 with a £200,000 mortgage to a partner who takes on half the mortgage, the consideration is £100,000 (half of the mortgage they assume). At £100,000, no SDLT is due because it falls below the £125,000 threshold.

Where the consideration exceeds the threshold, SDLT is calculated at standard residential rates. Where the transfer is to a spouse or civil partner as part of a divorce court order, SDLT is exempt entirely. Always check the specifics with your conveyancer, because the rules differ for gifts, trusts, and inherited shares.

Once the TR1 is signed and any SDLT return is filed, the conveyancer submits the application to HM Land Registry. The title is updated to reflect the new ownership, usually within four to twelve weeks depending on Land Registry backlogs. The new title is then issued to the new owners.

Legal fees for a transfer of equity range from £400 to £900 plus VAT for a straightforward case. Add £40 to £500 for the Land Registry application fee depending on property value, around £20 for ID checks, and any SDLT if applicable. Lender consent fees of £100 to £300 may also apply.

Most transfers complete in four to six weeks. If a mortgage is being amended at the same time, allow another two to three weeks for the lender's processing. Divorce related transfers can take longer because they wait on the court order being finalised.

Some people try to transfer ownership without engaging a conveyancer, using a basic deed of gift or just adding someone to a bank statement. This does not change the legal ownership. Until the TR1 is filed and Land Registry updates the title, the original owner remains the legal owner, with all the legal and tax exposure that implies. If the original owner dies, the property forms part of their estate regardless of any informal arrangement. Use a regulated conveyancer, every time.

Our panel firms handle transfers of equity at fixed fees from day one, with the SDLT calculation built into the quote so there are no surprises. ID and AML are completed in ten minutes via Credas, the same as any purchase or sale.