Transferring ownership of a property

If you are a home-owner, there may come a time when you want to transfer the ownership of your property to someone else - or you may be the recipient of a property from an inheritance that means the ownership is transferred to you.

On the face of it, the process of handing over a property would seem to be a simple, straightforward process, but, while that might be the case for many transfers, there are nevertheless some things that you'll need to consider.

There are several situations that might arise for which equity in a property needs to be transferred to someone else - or from them to you, and despite the use of the words “equity” and “transfer”, it does not necessarily mean that any money will change hands.

Note that the transfer of equity does not always mean the entirety of the ownership, and may simply be a percentage.

Co-habitation

If one partner owns a property, and the other moves in, it's quite common for the relationship to be marked by transferring a share of the property's equity in their name. Typically, this will be a spouse, civil partner or other co-habitee, and their name will be added to the title deeds.

Ceasing co-habitation

In the situation where a partnership has deteriorated, such as a separation or divorce, you might want to buy out their share of the ownership.

Buying out a joint owner

The joint owner doesn't necessarily have to live in the property but still have their name on the deeds as part-owner (perhaps they had assisted in the original purchase), and you are now in a better financial position to buy out their share.

Replacing or buying out a tenant in common

Groups of up to four people might own a property as tenants in common, with a Deed of Trust drawn up to define the proportions of ownership by the named individuals, and other information such as their identities. When one of the current tenants in common wants to sell their portion of the ownership or replace themselves with someone else, the transfer of this equity will trigger the necessary paperwork.

Selling your share as joint owner

Similarly, your name might appear on the deeds, whether you are living there or not, and one or more of the co-owners want to buy you out.

Gifting the property

This is common with, for example, parents buying a property and then transferring ownership, at least in part, into the name of the child or children. In addition, this might be the case for a variety of relationships, including spouses and civil partners, or other family members (although be aware of the rules governing inheritance tax).

A bequest in a will

You might be the recipient of a property in someone's will, which, after probate, will need to be transferred into your name before you can do anything with it (again, it's wise to be aware of inheritance tax where it applies in such cases).

Inheriting a property is a special case because, in all likelihood, you may not know that you are mentioned in the will, and certainly not to be gifted the property. 

It's particularly important, too, because not only do you need to consider the implications of inheritance tax, but also what it means in terms of transferring the property into your name, even if your immediate plans are to sell it.

Second home

When you inherit a home that's in addition to the one that you currently own or part-own, this inheritance is now designated as a second home. This means that, were you to keep it, you will be paying higher council tax. 

But you should also bear in mind that, in the intervening time between the home being valued for probate purposes and you selling the home on, sufficient time might have passed for the value of the home to have risen. 

If the difference has risen above the Capital Gains Tax (CGT) allowance of £12,500, you will be liable for paying the tax on it.

Inheritance tax

The person bequeathing their property has an allowance of £325,000 (with an additional £175,000 if the home was their primary residence, making a total of £500,000). 

It gets more complicated if the home was owned by the owner of the will and a pre-deceased partner or spouse, as their allowance can be added to the amount, assuming the limit on time has not elapsed. 

Anything above the allowance will then be subject to the current rate of Inheritance Tax, and must be paid within a set amount of time of the request being received.

Joint inheritance

If you are inheriting the property jointly with someone else - for example, with siblings - the situation becomes even more complex. 

The decision-making process as to what to do with the property does not depend on seniority in the relationship, nor does it rest with who has the largest share (assuming it hasn't been bequeathed equally). 

Current residents

The will might leave a property to you, but there might already be someone else living there, such as tenants (if the property is part of a rental portfolio), or someone who has no rights to the title, but they have the right to remain living there. 

Handling this relationship with respect to the future of the property needs delicate handling.

Outstanding mortgage

If you have been bequeathed a property that still has a mortgage against it, you will need to take over the responsibility of the mortgage payments (to avoid the mortgage foreclosing on the property and taking control of it to manage their investment). 

If you have sufficient money to manage the payments then this will work; however, you might need to find other ways of paying off the mortgage, from renting the property out to selling it quickly, taking into account the time and effort needed to make this happen.

Dying intestate

Not everyone makes a will, which will mean the property and other possessions will be arbitrated through the probate process. 

This will take time to iron out any complexities that arise, such as who the legal next of kin and those with a call on the estate of the deceased are.

The short answer is that you don't. As with any standard conveyancing process, you can act in the place of a conveyancing solicitor.

However, this is inadvisable because of the technicalities and complexities that come with any transference of ownership. Some transactions are more straightforward than others, but you will nevertheless need to expend a lot of effort and time in ensuring you get the details right. And you will have no legal recourse should you get anything wrong or if you invalidate any aspect. 

Any problems that surface will also not be mitigated by indemnity insurance unless you take out a policy to cover yourself.

It is always best to use the experience and knowledge of qualified conveyancing solicitors to manage the legal process. They will know what to do and will ensure that your transaction is the focus of their attention, talking you through each stage and keeping you apprised of progress and problems.

In addition, the process of transferring ownership of a property often comes at a time of other stresses, and it's easy to ignore some important part of the process if you try to manage it yourself.

If you are thinking of doing the conveyancing yourself, then, as a way of saving money, it's very likely to be a false economy.

If you are concerned about what the next steps are for transferring the ownership of a property to yourself or others, then you'll need legal representation with experience in such matters.

The experts at Homeward Legal are well-versed in all aspects of the conveyancing process, including transferring property ownership, providing a quality conveyancing service at a fee that is great value for money!

Call  to get your conveyancing quote started, or to discuss your concerns with your plans to purchase or sell your next home.