Transferring ownership of a house

[Mojooo]

Hi

Person A has a house they share with Person B.

Person A wants to move away (and for reasons I won't go into here - it is not to do with inheritance or tax dodges or anything - its just an internal family matter) is happy to transfer the house to Person B for 'free'.

As I understand this part is not particualrly difficult as you just make a transfer at land registry - am I right in thinking you need a solicitor to do this?

The house also has a mortgage on it which Person A pays - ideally it would be as simple as Person B taking over the mortage but I suspect this won't be allowed - so Person B will have to get a mortgage to discharge the original mortgage?

After that essentially B owns the hosue and has taken on the responsibility for paying the mortgage - they have not paid A anything direct.

Is it that simple or have I missed something?

I will seek legal advice but just looking for the overview.

[anonymous-user]

Here is a simplified guide

http://freeconveyancingadvice.co.uk/remortgages-tr...

It misses out some important bits about sdlt and mortgages, but you might get something from it

[Sheepshanks]

Mojooo said:

As I understand this part is not particualrly difficult as you just make a transfer at land registry - am I right in thinking you need a solicitor to do this?

The house also has a mortgage on it which Person A pays - ideally it would be as simple as Person B taking over the mortage but I suspect this won't be allowed - so Person B will have to get a mortgage to discharge the original mortgage?

It won't be dead simple - the lender will have registered a charge against the property.

[Mojooo]

Sheepshanks said:

It won't be dead simple - the lender will have registered a charge against the property.

Yea, so if the mortgage is with the Halifax - if Person B gets another mortgage with the Halifax they will allow the transfer because they will have been paid off?

[bladebloke]

It can all be done without too much trouble, assuming B is a suitable candidate to get a mortgage for the amount outstanding.

And you don't need a solicitor in order to arrange a transfer from one person to another. However, because there's a mortgage, the lender(s) will require a solicitor/conveyancer to act for them to ensure their security is protected throughout, or discharged at completion (depending on how things work out). So you are going to be using one - best thing to do is engage one now and go and talk to them about the ins and outs.

Having said that, speaking to a mortgage broker in advance might be sensible to discuss options for the loan to B.

[Rangeroverover]

I bought a house from the in laws, house worth about £250k, their mortgage £120k, I took out a £120k mortgage and "bought" it from them. the only oddity is it shows on rightmove as a sale at £120k. I gave them value for the balance in a lifetime tenancy in the annexe at my house.

AS long as the solicitor is on board and understands the whole picture everybody happy

[Jobbo]

Rangeroverover said:

I bought a house from the in laws, house worth about £250k, their mortgage £120k, I took out a £120k mortgage and "bought" it from them.

If you'd had to take on a slightly larger mortgage (i.e. over £125k) it would have been subject to SDLT - complicated further now, if you already own other property.

[mel]

Dependent on the figures involved how will this effect Stamp Duty? Surely if the "gifting" element drops the value below a change in band it could be seen as avoidance?

[KevinCamaroSS]

My thoughts immediately went to the stamp duty question.

[Mojooo]

I am not sure of the actual value - it probably is around that limit (125k) - maybe around 120k but it has not been valued recently.

Obviously if it is not a 'sale' how do you come to a value?

[Rude-boy]

Jobbo said:

Rangeroverover said:

I bought a house from the in laws, house worth about £250k, their mortgage £120k, I took out a £120k mortgage and "bought" it from them.

If you'd had to take on a slightly larger mortgage (i.e. over £125k) it would have been subject to SDLT - complicated further now, if you already own other property.

I would also hope that there was involvement form someone who fully understands Wills and Probate as well as it sounds like there was a gift that was intended as a PET (Potentially Exempt Transfer) but the reservation of benefit in the annex may have defeated that. I don't know as i don't know enough detail and it is at the point of IDing that potential issue i would have referred that aspect of the matter to a colleague. If i were in triple R's shoes i would want to know that answer to this post as soon as i read it of be making a call just to check that his solicitor had covered that potential issue off, if indeed it exists once there is more meat on the bone.

[Jobbo]

Rude-boy said:

I would also hope that there was involvement form someone who fully understands Wills and Probate as well as it sounds like there was a gift that was intended as a PET (Potentially Exempt Transfer) but the reservation of benefit in the annex may have defeated that. I don't know as i don't know enough detail and it is at the point of IDing that potential issue i would have referred that aspect of the matter to a colleague. If i were in triple R's shoes i would want to know that answer to this post as soon as i read it of be making a call just to check that his solicitor had covered that potential issue off, if indeed it exists once there is more meat on the bone.

I agree with that entirely.