Can I transfer my property to my partner to avoid Stamp Duty obligations?
“I currently live overseas and have decided to add my wife’s name to my UK property for tax reasons. My mortgage lender has consented to this transfer of equity. Will I still have to pay Stamp Duty?”
Under the current world-wide circumstances, and the global pandemic reaping its effects throughout, this is a great question to be asking at this point in time. This highlights one of the extremely few benefits to arise from the Covid-19 crisis.
Reasons for property transfer between married couples
There are a variety of reasons for transferring property from one spouse to the other. Some examples are:
- Plans for separation or divorce
- To reduce income/ Capital Gains Tax due to one spouse paying a lower rate of tax than the other
- To provide security and a reassurance to both partners
Why act now?
On 8th July 2020, Chancellor Rishi Sunak announced a temporary holiday on Stamp Duty Land Tax on the first £500,000 of all homes sold in England and Northern Ireland.
Under the ‘usual’ circumstances (after the March deadline), the normal SDLT rules will apply, meaning that Stamp Duty Land Tax will again be charged depending on the type of transfer, marital status and other important factors and considerations.
But as it currently stands, until 31st March 2021, no stamp duty is payable between spouses as long as one party is not taking on more than £500k of the existing mortgage.
What else do I need to consider when doing this?
Thousands of people that have looked to take advantage of the Stamp Duty holiday have also felt a pressure to rush an important financial decision regarding something as important as property, due to the Stamp Duty holiday deadline.
It is crucial to make sure that you seek the appropriate professional advice when making changes to things as important as property transfer. Speaking to a professional can also help you avoid making any costly errors, or missing any other related opportunities that come with a financial gain.