Swapping names on property title to escape reposession
Discussion
Ok, so what if you ignore the insolvency bit. What is the implication of trying to swap one person for another? Presumably the bank would need to write a completely new joint mortgage? Would it be considered as a sale/purchase and hence be liable for Stamp Duty?
Also, what would be the CG implication? Would just the person exiting be liable (for their share of the CG to that point) or would the whole CG be payable (with the reference point being reset to that date)?
Also, what would be the CG implication? Would just the person exiting be liable (for their share of the CG to that point) or would the whole CG be payable (with the reference point being reset to that date)?
My undersanding is that yes it will class as a new transfer so would be liable for stamp duty. There was a thread on here the other day talking about couples (unmarried) splitting up, even if one person was staying on then just to remove the other name from the deeds would still result in stamp duty being payable, and that wasn't even adding a new name. The only exclusion seems to be married people going through a divorce.
As far as the capital gain, I am not 100% how it gets classified, however even if in theory it becomes due for your portion you should be allowed to roll it over onto the next property, the fact that the next property is the same property shouldn't matter. Might bugger up any taper relief you are accumulating though I suppose.
As far as the capital gain, I am not 100% how it gets classified, however even if in theory it becomes due for your portion you should be allowed to roll it over onto the next property, the fact that the next property is the same property shouldn't matter. Might bugger up any taper relief you are accumulating though I suppose.
minimax said:
Cheers guys.
the easy way around paying stamp is to add one person on to the mortgage and then wait a week and take the other off the mortgage.
perfectly simple to arrange and classed as a transfer of equity on both counts.
it happens daily, very very simple.
Why don't more people use this as a loophole when genuinely buying/selling then?
pdV6 said:
Cheers guys.
the easy way around paying stamp is to add one person on to the mortgage and then wait a week and take the other off the mortgage.
perfectly simple to arrange and classed as a transfer of equity on both counts.
it happens daily, very very simple.
Why don't more people use this as a loophole when genuinely buying/selling then?
combination of ignorance, mistrust, morals, solicitors with an eye on the law etc... it can be done though, indeed I know many deals that have been done this way
Smartie said:
does it also assume that the mortgage co would be happy with the arrangement too?
well absolutely, I rather took that as a given (must try not to always think in work mode!) it does require the new party to be acceptable to the lender (and bear in mind all lenders have different terms and conditions so what is acceptable to one may very well not fly with another) and also to be capable in the lenders eyes of taking on the whole of the mortgage come the second transfer of equity in to sole names
minimax said:
does it also assume that the mortgage co would be happy with the arrangement too?
well absolutely, I rather took that as a given (must try not to always think in work mode!) it does require the new party to be acceptable to the lender (and bear in mind all lenders have different terms and conditions so what is acceptable to one may very well not fly with another) and also to be capable in the lenders eyes of taking on the whole of the mortgage come the second transfer of equity in to sole names
Not just the lending aspect though, as surely they are effectively a party in tax evasion?
Smartie said:
does it also assume that the mortgage co would be happy with the arrangement too?
well absolutely, I rather took that as a given (must try not to always think in work mode!) it does require the new party to be acceptable to the lender (and bear in mind all lenders have different terms and conditions so what is acceptable to one may very well not fly with another) and also to be capable in the lenders eyes of taking on the whole of the mortgage come the second transfer of equity in to sole names
Not just the lending aspect though, as surely they are effectively a party in tax evasion?
who said they need to know?
obviously I would not take part in such a scheme or condone it
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