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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 70516
Experience:  Over 5 years in practice
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Hello, mine question is in two parts: 1 - I have jointly owned

Resolved Question:

Hello, mine question is in two parts:
1 - I have jointly owned a property since February 2007 with a partner and we have mutually agreed to end the partnership. He doesn't want any further responsibility for the property and wants to sign it over to me. There is no mortgage on the property. If he signs a Land Registry Transfer form (which one?) will there be any financial implication for him or for me?
2 - Once I have acquired the full legal ownership I would like to transfer the property to my sister as a repayment of a family debt. Can I do this without any tax or cost implications? She lives in Singapore.
Submitted: 3 years ago.
Category: Law
Expert:  Jo C. replied 3 years ago.
Hi.
Thank you for your question. My name is ***** ***** I will try to help with this.
If there is no mortgage on the property, there is clearly a huge amount of value which she is agreeing to transfer to you. What is the reason behind that?
It is extremely relevant as to what financial implications the may be for you if you have the property.
What is the property worth on the open market?
Customer: replied 3 years ago.

I borrowed the money from my sister in Singapore to pay off the mortgage which is why I want to pay her back and she has agreed to take over the ownership of the property. My partner did not make any financial investment in the property at any time nor did he pay the mortgage payments when we had the mortgage. The apartment is worth around £300,000 on the open market.

Expert:  Jo C. replied 3 years ago.
Thanks
There is a transfer to you of £150,000 in value and stamp duty land tax is payable at 1% on that by you.
There is no capital gain tax issue.
If she dies within 7 years and leaves an estate worth £325,000 or more there may be inheritance tax to pay.
They are the only financial issues to take into consideration.
Can I clarify anything for you?
Jo
Customer: replied 3 years ago.
I paid £247,000 for the apartment as well as the legal fees and stamp duty at that time so surely any tax liability to me would be based on the difference if I take over the apartment? If I sell it to my sister back to my sister to repay her the loan I took to buy it originally, would there be a transfer cost and if so wouldn't the same numbers apply by that I mean the difference between what I paid then to what it is worth when the transfer is made?
Expert:  Jo C. replied 3 years ago.
Thanks. I will type out an answer now.
Expert:  Jo C. replied 3 years ago.
I agree with you however the Stamp Office will usually look at it differently.
They are not bothered where the money comes from.
You paid all the money but the property went into joint names.
As far as they are concerned, you own half each and you are now acquiring the other half.
I know that it's grossly unfair because in effect all the money is yours but that is something you would have to take up with HMRC Stamp Office.
If you sell it back to your sister to repay the loan, there is stamp duty for her to pay even though she lent you the money.
You are of course free to sell it on the open market to repay her and that is the way the stamp office look at it.
The price that you paid for it and what you now sell it for is not a consideration because it is the consideration being transferred on which tax is paid, not the difference.
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