Do I pay Stamp Duty Land Tax (SDLT) on a transfer of equity?

HMRC Stamp Duty rules are complex. Find out if you will need to pay any tax and if so, how much. See our easy to follow Transfer of Equity Stamp Duty Table below:

See also: The Transfer of Equity Process Explained?

How is Stamp Duty calculated on an equity transfer?

Stamp Duty Land Tax (SDLT) is payable on the 'Chargeable Consideration' when transferring equity held in property or land.

When buying a property, chargeable consideration is the amount of money a buyer pays for the property.

However, when equity in a property is transferred from one person to another, chargeable consideration is calculated on the amount of debt transferred or taken on.

When transferring equity - Stamp Duty is payable on the amount of the mortgage being taken on by the new owner.

For example:

David owns a property worth £600,000 and has an outstanding mortgage of £400,000.

David and Sheila get married, and David transfers 50% ownership of the property to her.

Sheila will have to pay Stamp Duty on £200,000 (£400,000/2 = £200,000 - this being the 'Chargeable Consideration')

Is the Stamp Duty threshold the same on an equity transfer?

Yes.  SDLT will only be payable if the chargeable consideration exceeds the threshold (£125,000). The threshold is the same as if it would be when purchasing a property.

How much Stamp Duty will I have to pay?

Stamp Duty is currently payable on the following basis:

Bracket Standard rate Buy-to-let/second home rate
Up to £125,000 0% 3%
£125,001 - £250,000 2% 5%
£250,001 - £925,000 5% 8%
£925,001 - £1.5m 10% 13%
over £1.5m 12% 15%

When is Stamp Duty payable on a transfer of equity* 

Circumstances SDLT Payable Comment

No mortgage

No

Stamp Duty is only payable on the mortgaged part of the property.  If the property is wholly owned then no stamp duty is payable

Getting married, entering into a civil partnership or moving in together

Yes

SDLT is payable if the equity being transferred is greater than the SDLT threshold

The transfer is a gift

NO

If there is no consideration, SDLT does not usually apply

If one person takes on a larger share

Maybe

If a property is jointly owned and the equity is split equally, no SDLT will be payable.  However if one person takes on a larger share, SDLT maybe payable. If the larger share is given as a gift then there is no consideration and SDLT will not be payable.

Transfer of outstanding mortgage

Maybe

If one person takes over another person’s ownership of a property, the property is mortgaged, and the consideration is above the threshold, SDLT will be payable.

Divorcing/dissolving civil partnership

No

No SDLT payable.  Also applies if the marriage is annulled or a legal separation is entered into.

You are left the property in a will

No

No SDLT is payable, even if you take on the mortgage on the property from the date the person died.

Sce: https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-propertyy

Table applies to property equity transfers in England only.

*As with all tax matters, SDLT can be complicated.  You should speak to a conveyancing solicitor to confirm your position with respect to SDLT.  To speak to a solicitor, without obligation, call 0800 612 0377.

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Helen Goddard, Legal researcher

About the author

Helen is an award-winning legal researcher and author. She is an experienced court litigation report proofreader and has written extensively on legal matters.

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