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TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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I own an investment property 50:50 with a friend. I am

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I own an investment property 50:50 with a friend. I am looking to complete a 2:1 equity transfer where I am looking to transfer my share of the mortgage on the property to the friend. This will be £36K and will be the only consideration. Is either side liable for any stamp duty land tax and are there are Capital gains tax implications.

Hello and thank you for allowing me to assist you.

Customer: replied 8 months ago.

You pay SDLT if the consideration given in exchange for the share transfer is more than the current SDLT threshold for the property type.

Example: the owner of a property valued at £500,000 with an outstanding mortgage of £400,000 transfers half the property to their partner . Their partner takes on 50% of the mortgage (£200,000).

HMRC charge SDLT on the amount paid for a property.

By taking liability for the mortgage, the owner’s partner has given consideration of £200,000 (50% of £400,000) for their share of the property which is £1,500 SDLT (0% of £125,000 + 2% of £75,000).

You don’t need to pay SDLT or tell HMRC about freehold land and property transactions with a total chargeable consideration of less than £40,000,

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