Questions and answers: Capital Home Loans transfer of equity

• I currently have a joint Capital Home Loans mortgage with my brother and am looking into the option of him taking on the whole mortgage and removing myself from it, so as to enable me to purchase somewhere with my soon-to-be-wife. The outstanding mortgage is approx 300k, and the property value is approx 500k. Is this a transfer of equity? Is land tax involved?
• Can you tell me how to have a person removed from the title documents to a house if the mortgage is with Capital Home Loans
• When it comes to transfer of equity conveyancing involving a remortgage with Capital Home Loans should I be charged value added tax on the following: (1) Land Registry fee on the transfer of equity (2) Pre - completion search fee (3) SDLT E submission on the transfer (4) Bank TT fee
• What do I need to do when it comes adding or removing names (transfer of equity) to or from my Capital Home Loans mortgage account?
• I plan to remortgage my maisonette in Winchelsea changing from Leeds Building Society to Capital Home Loans. The apartment is currently in joint names but intend for it to be in my name only when I remortgage. My former partner is OK with this and is happy to sign a form but neither of us want to get a second conveyancer involved.
• My partner and I co-own a property in Witham . Mortgage is with Capital Home Loans. I would like to transfer full ownership to him with no payment of money but without using a conveyancer. Is this likely to be easy to so?
• Can I apply to borrow more money from Capital Home Loans as part of a Transfer of Equity?

Questions that your lawyer could ask regarding your Capital Home Loans Transfer of Equity

General Advice to read in supplemental the above Capital Home Loans transfer of equity Questions and Answers :

Tax and Legal

There are numerous potential tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the Capital Home Loans conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold properties

Should the tenure of your property be leasehold, provisions in the lease may have a requirement for notices to be served and that you have a license to do so from the freeholder. If such conditions are not strictly observed you may be in violation of your covenants under the lease. This could potentially result in the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made pursuant to an Order of the Court, then Insolvency Indemnity Insurance is not required. In other situations, where a property is being transferred at less than market value between joint owners, an Insolvency Act Indemnity Insurance policy may be required. This is something that that your conveyancing solicitor will check with Capital Home Loans This is because, if the outgoing party is made bankrupt in the future, their Trustee in Bankruptcy could argue that they had transferred the property in order to avoid their creditors and apply to the Court to have the transaction set aside. If this happens, it could affect your lender or a future buyer from you as they would lose the property and the lender may not get back what they have loaned to you. The Insolvency Act Indemnity Insurance policy only protects lenders such as Capital Home Loans or future buyers from you. If there is no mortgage and the outgoing owner is made bankrupt, there is a risk to you that you could lose your home if the transfer is set aside. The cost of the Insolvency Act Indemnity Insurance policy is dependent on the market value of the property at finalisation of the transfer of equity conveyancing.

Preparing the Transfer of Equity with a Capital Home Loans Mortgage

When it comes to preparing the the Land Registry documents your lawyer should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.

If Capital Home Loans is joining in the transfer to release someone from liability, put the release in the ‘additional provisions’ panel if someone is entering into a covenant relating to the charge, place it in the ‘additional provisions’ panel stamp duty land tax is not payable when there is no chargeable consideration for the transfer (Schedule 3, paragraph 1 of the Finance Act 2003). In the case of a transfer subject to a charge (even if the transfer is by way of gift) or if a property has been transferred for no value and there is an associated discharge, HMRC would view this as an assumption of an existing debt by the purchaser (Schedule 4, paragraph 8 of the Finance Act 2003) and stamp duty land tax may be payable if you wish you may state in the ‘additional provisions’ panel that ‘This transfer is made subject to a charge dated… in favour of…’

On form AP1, your lawyer should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.

Content on this webpage is for general information and only applies to England and Wales. It does not constitute advice for members of the public who should contact their lawyer,mortgage broker, insurer and accountant for specific advice relating to transfer of equity. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.