There are a number of reasons why you might want to transfer the ownership of a property into someone else's name. It could be as a result of a property sale or purchase, or it could be because of a divorce or a 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, and this work is carried out by a Conveyancer or a Conveyancing Solicitor.
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 will have been legally transferred from the seller to the buyer.
Transferring a Property into One Person’s Name
If a property is owned jointly by two or more people, but one or more names need to be removed from the title there is a set procedure for this. This typically happens following a divorce or separation. It can also happen if siblings or friends have purchased a property together and certain people later want to be released from the ownership.
If you have found yourself in this situation, a Conveyancer will able to help you complete the property 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.
In some cases, there may also be Stamp Duty Land Tax to pay. This won't apply if the transfer of property ownership is part of a divorce settlement, but if the transfer is happening for another reason then this is an important factor to bear in mind. If there is a mortgage on the property, this too will need to be transferred into the remaining owner's name.
Transferring a Property into Joint Names
Alternatively you may want to add a name to the title register if, for example, you want to make a spouse, partner or family member a joint owner. In this situation, 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, so it's important to check whether this applies so that you can budget appropriately. 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 as a 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.
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, and how the property was jointly owned if so.
If the property was jointly owned as joint tenants and 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 so that the title can be updated to remove the deceased person's name. To do this, you will need to fill in a DJP form and send it to the Land Registry, with an official copy of the death certificate.
If the property was jointly owned as tenants in common, HM Land Registry will again need to update the title to remove the deceased person's name from the register. The deceased person's interest (their share) will be protected by a restriction on the register and the share will then form part of their Estate
If there isn't a surviving joint owner, the property will need to be administered according to the terms of the Will, if there is one, or inheritance laws called the Rules of Intestacy if there isn't. If a Beneficiary is entitled to inherit the property, they can have it 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 will also need to be enclosed (along with the ID1 if not represented by a Conveyancer).
A Probate Property Conveyancer can help you Assent a Probate property.