Transfer of equity
There are a number of reasons why you may want to change the legal ownership of a property. It may be due to marriage, divorce, tax planning or a change in the share status of the property – this is known as a Transfer of Equity. Undertaking these transfers of equity can be complex and it's important they are completed correctly.
Some transfers will be considered a 'gift' or a 'transaction at under value'. Depending on the value of a share in the property there may be stamp duty to pay, but some transfers of equity are exempt, for example a transfer of equity under the order of a court following divorce proceedings.
If transfers of equity are effectively a gift of equity in the property, the law allows for transfers to be undone if the person making the gift becomes bankrupt within three years of the date of the gift. This enables the law to defeat debtors who seek to protect their property from creditors by
transferring it to a third party. Because of the effect the insolvency law can have on property transfers a lender will insist that the property owner, who is
transferring a share in a property for free or for less than it is worth, signs a deed called a Declaration of Solvency. The lender may also require the property owner to take out an insurance policy to protect the mortgage repayments. We are able to draw up a Declaration of Solvency and can advise on how insolvency law could apply to you and in some cases may recommend title insurance and place this on risk if required.