First Direct transfer of equity: q and a’s

• My father died early last year leaving a mortgage-free property to me and my step brother equally. Having continues to reside at the premises, there was a condition in her will saying the propertycould not be sold for 2 years following her passing so he could reside there for a prescribed period. He now wants to remain in the property beyond the specified period. We have considered a transfer of equity. Am I right in saying we'd get a valuation then he'd get a mortgage in the traditional way to acquire my share?
• How and when do I cover the costs of the Stamp Duty Land Tax chargeable for the transfer of equity in my property in my name alone which is happening simultaneously with a switching mortgage with First Direct?
• I acquired a flat with my cousin five.seven years ago Since then, we have both got married. We are now seeking to do a transfer of equity so my name comes off the First Direct mortgage. There is a meaningful difference between the value the First Direct say and what the property would sell for currently. Can you offer any advice?
• I am am in need of a conveyancing solicitor to undertake my transfer of equity. First Direct have been approached for a remortgage. I considered asking my mortgage broker. I am lead to believe he may receive a kickback for suggesting a firm, but also of benefit will be that he knows the lawyer, has a working relationship with them. Is my logic flawed?
• I jointly own a apartment in Ampthill , with a First Direct loan with my ex partner. He and his fiance are going to buy me out. We had consent from First Direct to replace my name with hers. The transfer of equity has to be completed by a conveyancer for First Direct (supposedly). Is it possible for us to do the Land Registry formalities?
• Have recently separated from my ex of 18 years. I'm now back with my mum and dad and she wants to remain in the property and buy me out. What portion do I get. Is it 50% of the equity after paying off the mortgage with First Direct? I assume proper valuations are necessary but I would like to be confident that I'm getting I am not being taken advantage of
• I am thinking of mortgaging my home in Romsey does my lawyer need to be on the First Direct Conveyancing panel. The conveyancing also involves a transfer of equity.

Sample of information requested in a conveyancing solicitor questionnaire concerning a First Direct Transfer of Equity

Information to consider in supporting the above First Direct transfer of equity information :

Tax and Legal

There may be various tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the First Direct conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold properties

Should the tenure of your property be leasehold, the lease may require that you have a license to do so from the landlord. If such terms are not adhered to you may be in violation of the lease. This could potentially result in the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made as a result of 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 First Direct 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 First Direct 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 varies based on the valuation of the property at the time of completion of the transfer of equity transaction.

Preparing the Transfer of Equity with a First Direct Mortgage

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

If First Direct 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 conveyancer should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.

Information provided 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.