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Transferring Ownership of a Property

13th February 2018

There are various reasons why you might want to transfer the ownership of a property into someone else’s name. The most obvious is that you have bought or sold a property. But the need may also arise in other situations, such as following divorce or death.

In this article we explore some of the most common reasons why you might want to transfer ownership of a property, and how to go about doing it. 

Transferring a Property that has been Purchased or Sold

When you buy or sell a property, you will need go through the conveyancing process. 

Conveyancing is the legal term used to describe the buying and selling of property. You can manage the conveyancing process yourself, or you can instruct a legal expert known as a ‘Conveyancer’ to do it for you. Most people choose to use a Conveyancer, due to the risks associated with DIY conveyancing. 

In the final stages of the conveyancing process, the buyer’s Conveyancer will register the property in the name of the buyer with HM Land Registry. Once this is done, ownership of the property has been legally transferred from the seller to the buyer. 

Transferring a Property into One Person’s Name

Sometimes a property will be owned by more than one person, but you wish to remove a name (or a number of names) from the title. This typically happens following divorce or separation. It can also happen if siblings or friends have purchased a property together, and certain parties wish to be released from the ownership.

If you have found yourself in this situation, a Conveyancer will able to help you complete the transfer. 

If you are transferring a property into one person’s name following separation or divorce, you should also speak to a Family Lawyer about how best to protect your position. This is important, regardless of whether you are the one who is moving out (in which case, you may wish to claim your share in the property) or you are the one staying (in which case, you will want to avoid your ex making a claim later down the line).

In order to transfer a property into one person’s name, you will need to complete a ‘Transfer of Whole of Registered Title’ form and send it to HM Land Registry, along with the correct fee and identity verification forms. 

Unless the transfer of property ownership is part of a divorce settlement, there may also be Stamp Duty Land Tax to pay. If there is a mortgage on the property, this too will need to be transferred into the sole owner’s name. 

Transferring a Property into Joint Names

Alternatively you may want to add a name to the title register. Often this happens when you want to make a spouse, partner or family member a joint owner. If so, you will need to fill in a ‘Transfer of Whole of Registered Title’ form and send it to HM Land Registry, along with the correct fee and identity verification forms. Again, a Conveyancer can help you do this. 

In certain situations Stamp Duty will be payable. Furthermore if there is a mortgage, you will need the consent of the lender, and the new joint owner will need to be added to the mortgage.

For more information, see Transferring a Property into Joint Names.

Transferring a Property to a Family Member

Lastly, you might want to transfer ownership of your property to a family member.

This is typically done to minimise the amount of Inheritance Tax (IHT) that will be due on the individual’s Estate after their death. As long as you live for seven years following the transfer, the property will not be considered as part of your Estate. 

Or you might have different motivation – for example, you might want to help your children by providing them with their inheritance early.

It is possible to transfer the ownership of a property to a family member by way of gift, meaning no money exchanges hands. This differs to a Transfer of Equity, where the owner remains on the title and simply adds someone else to it. 

To transfer a property as a gift, you need to fill in a TR1 form and send it to the Land Registry, along with an AP1 form. If either side is not using a Solicitor or Conveyancer, an ID1 form will also be needed.

However, there are a lot of implications of gifting a property, which is why it is incredibly important to get specialist advice from an Estate planning expert first. 

For example, there may be Capital Gains Tax to pay if the property hasn’t been your main residence for the entire time you have owned it. The recipient may also have to pay Stamp Duty if there is an outstanding mortgage on the property.

Along with the tax considerations, there are other risks that you need to be aware of. For instance, you will no longer be the legal owner of the property, so your family member could theoretically evict you. You might think this would never happen, but it may occur due to factors that are outside your relative’s control. For instance, if he/she ever faces a divorce the property may need to be sold to raise funds, and their ex may even have a financial claim over it. 

Therefore you need to think carefully before transferring ownership of a property to a family member. 

Transferring a Property After Death

What happens to a property after the owner’s death depends on whether there are any surviving joint owners. 

If there is a surviving joint owner, he/she will become the sole legal owner of the property. However, it’s still necessary to inform HM Land Registry and transfer the property into the surviving owner’s sole name. To do this, you need to fill in a DJP form and send it to the Land Registry, with an official copy of the death certificate. 

If there isn’t a surviving joint owner, the property will need to be administered according to the laws of Probate. The beneficiary can have the property transferred into his or her name. This is called an Assent. An AP1 form and an AS1 form must be sent to the Land Registry, along with the Grant of Probate or Letters of Administration, the correct fee, ID1 and the Stamp Duty Land Tax certificate. 

A Probate Property Conveyancer can help you Assent a Probate property.

For a free online Conveyancing quote please click here.

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