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Residential Conveyancing Harrogate - Equity Release & Transfer of Ownership 


What is Equity Release? 

Simply put, equity release is a way for property owners to unlock some value of a property and turn it into a cash lump sum. There are 2 main property equity release schemes that are available, Home Revision Plan and Lifetime Mortgage. 
Home revision plan - This type of property equity release means that you sell all or a percentage of your home to a private company. In return, you will receive an agreed cash lump sum, a monthly income or both. 
Usually, under this plan, you are able to remain in the property, rent-free or for a nominal monthly rent, until the property is sold. When the property is sold, the private company who purchased your property would receive the proceeds of the sale (depending on the share of the property that was sold). 
Lifetime mortgage - This type of property equity release differs to a home revision plan as rather than selling the property, you would borrow against the value of the property. This sum can be paid as a lump sum, income or both. 
You can continue to live in the property and you will retain all legal ownership. This loan doesn’t require being repaid until you either pass away or move to different accommodation. There are interest rates under this equity release scheme which are charged at a fixed rate (and added on to the total sum of the loan). 
When entering into either of these schemes, you will need to consider the impact any received money will have on your welfare benefits, Capital Gains Tax, Income Tax and Inheritance Tax. You should also look to consider any other type of finance source that could be utilised before looking to release equity in your property. This is something we can discuss with you to ensure that you have clarity. 

What is the transfer of equity of properties? 

The transfer of equity is the legal process that is used to add or remove a person from the title deeds (ownership) of a property. There is no sale involving the property and, at minimum, one of the original property owners remains on the title deed. 
There are many reason why you might want or need to complete the transfer of ownership of a property, including: 
A relationship breakdown. If a couple separates, assets will need to be divided up – a home is normally the most significant one. 
A new relationship. You might have bought the house on your own and then later entered a relationship. A transfer of equity agreement could add your new partner to the title deeds. 
Buying out a co-owner. More people are buying properties with friends or family to get on the property ladder. There may be a time later on to buy them out. 
For tax purposes. Home owners sometimes transfer equity to their children or other family members to be more tax efficient. It can be seen as a gift, but always seek advice about your tax liabilities. 
In instances when all parties involved are agreed on the outcome, equity transfers are straightforward. However, it is important to look at every transfer individually, as it can become more complicated when there are mortgages or disagreements involved. This is something our residential property solicitors can help you with. 
Contact our licensed residential conveyancing solicitors by calling our Harrogate law firm on 01423 564551 or our Leeds law firm on 0113 200 7480. Our residential property solicitors are ready to help you. 

What is the transfer of equity process? 

There are 5 main stages in the transfer of equity process. 
Stage 1 - Review of the title deal. This is a check of the title deeds from the Land Registry. 
Stage 2 - Preparation of the deed documents. 
Stage 3 - Meeting involving all parties. When the documents are ready, they will need to be signed in front of an independent witness. 
Stage 4 - Notification to any mortgage lenders, banks or building societies. Written consent from the lender must be secured. 
Stage 5 - Register the transfer with the Land Registry. There is usually a fee (£90-£920 depending on the property value) to complete the registration. 

Tax & stamp duty implications when transferring property equity 

If there is the need to transfer a property into joint names – for example, due to marriage – you may be charged stamp duty if the house is subject to a mortgage. Despite no money actually changing hands, any new additions to the title deeds are taking on half of the responsibility of the mortgage debt. As such, anything above the threshold is subject to stamp duty land tax. Gov.uk offer the below example to illustrate: 
The owner of a property valued at £500,000 has an outstanding mortgage of £400,000. When they marry, they decide to transfer half the property to their new partner. 
This means their partner takes on half of the mortgage (£200,000). This is referred to as ‘chargeable consideration’. 
By taking liability for the mortgage, they must pay SDLT on that amount. It’s charged at £1,500 in this example (0% of £125,000 + 2% of £75,000). 
If there was no outstanding mortgage in this case, no stamp duty would be owed
If you are adding a person onto your property’s title deeds, Powell Eddisons' property solicitors highly recommend that a Deed of Trust is put in place to set out the terms of the ownership. - especially if there are unequal shares of ownership 

Powell Eddisons' residential property solicitors 

If you are looking at releasing equity or transferring ownership, Powell Eddison residential property solicitors offer conveyancing services to help you when making changes to the ownership of your property. Call us today for a free initial consultation with our experienced team of residential conveyancing solicitors. 
Our residential conveyancing solicitors can be contacted by calling our Harrogate team on 01423 564551 or ur Leeds residential property solicitors team on 0113 200 7480. We are ready to help you when making amends to the ownership of your property. 


Elaine Tottie 
Licensed Conveyancer 
Phone: 01423 564551 
Email: et@powell-eddison.co.uk 
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