If you are removing a name from the title deeds and/or adding a new name this is commonly referred to as a transfer of equity. We provide a fixed cost conveyancing quote for a change of ownership provided this is agreed with your co-owner.
Our fees and disbursements for dealing with the matter (which include acting for your mortgage company and dealing with the stamp duty land tax forms required) are as follows:
Our fees £500 plus VAT
In addition the following disbursements will be payable:
1. Land Registry fee £40.00
2. Office copies of your title £6.00
3. Land Registry Search £3.00
4. Bankruptcy Search £4.00
The total cost including VAT is typically £653.00
The quote is the same for a transfer from one name to two names, two names to one name or indeed two names to two names (where one party is removed and a new co-owner added).
Stamp Duty Land Tax and Transfers of Equity
Many people assume that Stamp Duty Land Tax (SDLT) will automatically not apply to transfers between co-owners. This is not correct.
In some circumstances there are exemptions which means that duty is not payable for example transfers pursuant to divorce settlements.
However in most other cases Stamp Duty needs to be assessed in the normal matter – bearing in mind some special rules that the Revenue impose when dealing with a release from a debt – they take the view that the release of a co-owner from their mortgage liability is treated as if you had paid them cash for an equivalent amount i.e. if there are two owners and one comes off the title deeds and mortgage they will treat them as having been paid one half of the mortgage liability. To this they will add any payment being made between the parties. Then Stamp Duty is calculated at the normal rates.
This is best illustrated by two examples:
1. Tom and Jane own a property jointly with a £250,000 mortgage. They split up and Tom takes over the mortgage in his sole name and the bank releases Jane from her mortgage covenants. No payment is made to Jane. The Revenue treat Tom as having paid to Jane £125,000 (1/2 the mortgage amount as at the date of transfer) even though no cash changes hands. No Stamp Duty is paid however as this does not exceed the nil rate band of £125,000.
2. If however using the same example as in 1. above Tom pays Jane £10,000 for her share in the property the total payment (as far as the Revenue is concerned) is £130,000. This exceeds the lower band for SDLT and therefore 1% duty i.e. £1300 is due to the Revenue. Tom will need to pay this.
In summary if your mortgage is less than £250,000 and no payment is made then you are not likely to pay Stamp Duty.
If the property is leasehold we will have obtain a copy of the lease and comply with the requirements under the lease. A notice needs to be served on the Landlord and the Landlord will charge a fee, typically £50-100, to receipt such a notice. This is an additional disbursement you will have to pay.
No Hidden Extras
Unlike some conveyancers our quote includes all the following costs and expenses:
- Included emails, postage, letters in or out, faxing, scanning, photocopying or text updates.
- Included indemnity insurance contributions. We have cover for £10,000,000 (£8,000,000 above the minimum cover provided by most solicitors)
- Included storage costs of your file or deeds for free following completion
We do not impose additional fees or charges without your consent. If we believe that a matter falls outside the scope of our initial instructions (for example if upon receipt of draft documents we discover the matter is not standard) we will inform you of the difficulty and any additional charge. If this cannot be agreed with you we will stop acting.
All our quotes are based upon residential transactions where the payment between the parties does not exceed £100,000. They exclude properties with a tenant in situ, shared ownership and commercial properties.
We will only act for you and your mortgage lender. We will not act for the party being removed from the title deeds. They do not need to instruct their own solicitor (unless there are special circumstances) but will be advised to obtain independent legal advice. In all cases where they do not instruct lawyers a Land Registry ID1 will be required.
We do not carry out a investigation of title as you would expect. Generally your mortgage lender will not require a local search etc. You should continue to rely on the report given to you when you purchased the property.
Whilst we accept the majority of instructions we always reserve the right to refuse instructions at our discretion. All other offers, discounts or special terms are excluded from our on line quotes.
Unknown Costs and Limitations
Naturally some limitations apply to our fixed fee service and some transactions may attract additional fees, disbursements or third party charges . We can assure you that where third party charges are made we will pass the cost on as charged without any mark-up. Below are the most common examples of things that can increase the cost :
- Additional title documents from Land Registry – if we need to obtain additional documents from the Land Registry they will charge according to their current scale fee – these fees vary according to the type of document from £3-24 per – the most expensive being an office copy of a lease costing £24.
- Additional Searches – If your lender dictates searches may be required – for example local search.
Extra items charged by us
- Trust Deeds – if you require a trust deed to be drawn up because for example you wish to hold the property in unequal shares, the costs for this starts at £195 plus VAT but this includes storage of the original documents.
- Re-mortgage – our fees do not cover acting for a mortgage lender on a re-mortgage. Typically this would increase the costs by £300.00 plus VAT.
Money – What to pay and when?
You will normally pay the legal costs and the rest of the payments when your matter completes.
How to Instruct Us
If you would like to instruct us on a transfer of equity please call Mark Sadler on 01708 757575 or email: firstname.lastname@example.org and we will send out transfer of equity questionnaire to you.