Hodge Equity Release transfer of equity: q and a’s

• My wife and myself jointly own a buy to let. I am a top rate tax payer. Preferably I wish to do a transfer of equity into her name in order reduce our tax on rental income. Assuming Hodge Equity Release are happy with this the legal fees are not high. However what happens when we dispose of the property? As I would no longer be on the title documents would I lose my CGT relief.
• Me and a friend got a joint mortgage with Hodge Equity Release on a flat a couple of years ago. I am now thinking of purchasing a house on my own and my friend would like to buy me out. Once we have agreed a figure what are the next steps? Would there be any potential concerns with Hodge Equity Release with him being solely liable for the total loan rather than only half of it?
• Can you tell me how to have a person removed from the title documents to a house where the home loan is with Hodge Equity Release
• I am selling my equity in property in Warwick to my co-owners fiance, they are sticking with Hodge Equity Release as the the existing mortgage company. We are debating as to who must pay the legal bill for the transfer of equity. Should this be shared or is one party obliged to cover the legal bill?
• I got my Decree Absolute in 2011. For some reason I never got around to transfer ownership from the current 'joint' status to just in my name. I am ready to do that and so is she. Transfer-of-equity is needed. Hodge Equity Release is willing to transfer the property and loan in my name (affordability checks done). Does my ex need any legal representation?
• I understand we would need at least AP1 and TR1. Is this true?
• My decree absolute is through as is the consent order. Now I need to deal with the transfer of equity for the property and the Hodge Equity Release mortgage. I have asked Hodge Equity Release for the transfer of equity forms. What do I do now?

Information that may be required from your conveyancing solicitor is likely to ask about your Hodge Equity Release Transfer of Equity

Important warnings to consider in supporting the above Hodge Equity Release transfer of equity information :

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 Hodge Equity Release conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold premises

Should the tenure of your property be leasehold, 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 complied with 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 as a result of an Order of the Court, then Insolvency Indemnity Insurance is not required. In other cases, 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 conveyancer will check with Hodge Equity Release 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 Hodge Equity Release 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 Hodge Equity Release Mortgage

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

If Hodge Equity Release 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 conveyancing solicitor 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.