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Thomas
Thomas, Solicitor
Category: Property Law
Satisfied Customers: 7602
Experience:  UK solicitor holding an England and Wales practising Certificate.
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Can i give or sell my house to my partner for £1 to avoid stamp

Resolved Question:

Can i give or sell my house to my partner for £1 to avoid stamp duty?
What would happen re my mortgage- can he just get one for the property at normal market value?
Submitted: 2 years ago.
Category: Property Law
Expert:  Thomas replied 2 years ago.
Hi
Thanks for your question.
Is there a mortgage on the property already?
Is the property in your sole name at the moment?
Kind regards,
Tom
Customer: replied 2 years ago.

yes my sole name and yes a mortgage but also equity

Expert:  Thomas replied 2 years ago.
Okay.
Can you tell me why you want to sell/give your house to your partner?
What are you trying to achieve? I just need a bit more information before I'm able to answer accurately..
Kind regards,
Tom
Customer: replied 2 years ago.

I owe him lots of cash and have equity in my house but no way to release it as i dont work so cannot re mortgage, if he owned it he could re mortgage.

also, i have my father living there. i have always paid all the mortgage and allowed him to live rent free because i could afford it.

then i tried to get him housing benefit as he is on pension credit (eligible) and i dont work so cannot afford to lose the rental value of the property by allowing him to live there rent free.

when we approached council re housing benefit they claimed "contrived tenancy" and basically suggested that i should have charged him rent from day one ( played the system and taken cash from gvt because i could rather than what i thought was the right thing to do which was not to approach gvt until he/i needed it ).

Expert:  Thomas replied 2 years ago.
Hi
Thank you for your question and patience, I’m Tom and I’ll try to help you.
If you have an existing mortgage on the property then you cannot transfer the property’s legal title to him without the lender’s consent because they have a first legal charge which prevents transfers of title.
To transfer the title to him in his sole name your mortgage would have to be repaid upon completion.
You may consider whether you can get a mortgage together jointly so that you can transfer the property from your sole name to your joint names. This would be a transfer of equity and remortgage. If you cannot do this then you are stuck, because the only way that you can release equity from the property is by selling the property.
The alternative would be for you and your partner to execute a declaration of trust which states that although you own the legal title to the property, the equity in the property is divided up between according to specified percentages. You would have to both get advice from solicitor before executing this but it could be registered against the tile to the property. However, your partner could not borrow against it by getting a mortgage and then only way that he would actually see money from it is when the property is ultimately sold.
I am sorry I could not have better news for you.
My goal is to provide you with a good service. If you feel you have received anything less, please reply back as I am happy to address follow-up issues specifically relating to your question.
Kind regards,
Tom
Customer: replied 2 years ago.

so if he paid off the mortgage for me i could then transfer to him free of charge and not pay stamp duty?

he could then get a mortgage against the property?

would you suggest i take legal action against the council re housing benefit - can they claim contrived tenancy or do i have an argument?

Expert:  Thomas replied 2 years ago.
Hi,
If he paid off the mortgage then he would effectively be paying the amount remaining on the mortgage. Therefore, if the amount remaining on the mortgage is above the stamp duty threshold then he would have to pay stamp duty on it.
Once the property was in his name he could get a mortgage, yes.
I think it would be difficult to make an arguement against the council as to housing benefit if he is your partner and has already been living there for such a long time rent-free..
Kind regards,
Tom
Customer: replied 2 years ago.

so if mortgage is 297k, i could pay off 47k and then he could buy it from me at 250k ( 1% stamp duty) even if worth 550 ish?

Expert:  Thomas replied 2 years ago.
Hi,
Correct. That would be my view of the situation.
Tom
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