Common questions relating to Lloyds TSB Scotland transfer of equity

• My friend and I got a joint mortgage with Lloyds TSB Scotland on a house about a year ago. I am now thinking of buying a property on my own and my friend would like to buy me out. On the basis that we can settle on an amount what happens next? Would there be any potential problem with Lloyds TSB Scotland with him being responsible for the total loan rather than only half of it?
• My wife and I have 50:50 shares in a BTL. I am a top rate tax payer. Preferably I wish to complete a transfer of equity into her name in order mitigate tax on the letting income. If Lloyds TSB Scotland are fine with this the legal fees are inexpensive. 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.
• Can I transfer the equity held in my property with my Lloyds TSB Scotland home loan?
• My decree absolute has gone through as is the consent order. Now I need to sort out the transfer of equity for the property and the Lloyds TSB Scotland home loan. I have contacted Lloyds TSB Scotland for the transfer of equity application. What happens next?
• What if my application doesn't meet Lloyds TSB Scotland lending criteria for a transfer of equity?
• I understand we would need at least AP1 and Transfer Deed. Is this true?
• Am I best advised stop the direct debit for my mortgage with Lloyds TSB Scotland as soon as a date for my remortgage and transfer of equity has been agreed?

Information that may be required from your conveyancer is likely to ask about your Lloyds TSB Scotland Transfer of Equity

Important warnings to consider in further to the above Lloyds TSB Scotland transfer of equity Advice :

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 Lloyds TSB Scotland 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 obtain the consent of the freeholder. If such conditions are not strictly observed you may be in violation of your covenants under the lease. This could trigger 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 Lloyds TSB Scotland 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 Lloyds TSB Scotland 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 market value of the property at finalisation of the transfer of equity conveyancing.

Preparing the Transfer of Equity with a Lloyds TSB Scotland 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 Lloyds TSB Scotland 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.

Information provided on this webpage is for general information and only applies to England and Wales. It should not be regarded as 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.