Do I pay stamp duty land tax (SDLT) on a transfer of equity?

If you own a property and want to transfer ownership to another person, this is known as a transfer of equity. One question we are regularly asked is ’What are the stamp duty land tax implications of transferring equity?’

Depending on the circumstances, SDLT may or may not be payable when transferring equity in a property or land, from one person to another.

Do I pay stamp duty land tax (SDLT) on a transfer of equity?

In this blog, we explain what transfer of equity means, the rules around SDLT liability and how stamp duty land tax on transfer of equity is calculated.

What is equity?

Equity relates to the percentage of a property that you own outright. It will be the value of the property less any outstanding mortgage on the property.

What is a transfer of equity?

Transfer of equity is the legal process used to add or remove someone from the title deeds of property by adding or removing them as an owner.

A transfer of equity happens when an existing owner of a property or land adds or removes one or more people from the title deeds of the property or transfers full ownership of the property to another person.

The transfer must leave at least one legal owner. A property can’t have more than four owners, but there can be as many people involved in the transfer as necessary. For example, when removing a partner but adding multiple additional owners such as children or grandchildren.

Why do people undertake a transfer of equity?

There can be many reasons why and individual considers transferring equity. For example:

  • Divorce or separation.
  • A new relationship (to add a new partner to the deeds).
  • Marriage or civil partnership.
  • Property transfer to one individual if you have a share in a jointly owned property.
  • Buying out an ex-partner.
  • Gifting a property or share in a property to a family member such as a child or grandchild.
  • Inheritance Tax (IHT) planning.
  • Transfer property from a company.

What is Stamp Duty Land Tax (SDLT)?

Stamp Duty Land Tax (SDLT) is a tax payment made to HM Revenue & Customs (HMRC) when you buy a property or land in England and Northern Ireland. The amount of Stamp Duty Land Tax (or whether you need to pay at all) depends on the purchase price and your circumstances as a buyer.

Unless you are an eligible first-time buyer, you pay SDLT when you buy a residential property in England or Northern Ireland for more than the current threshold of £250,000.

In Scotland, you pay Land and Buildings Transaction Tax (LBTT), and in Wales you pay Land Transaction Tax (LTT).

The current SDLT thresholds are:

Is SDLT payable on transfer of equity?

Whether SDLT is payable on transfer of equity will depend on the circumstances, SDLT may be payable when transferring equity in a property or land, from one person to another. More details are below for a variety of circumstances.

What is the Stamp Duty threshold on a transfer of equity?

SDLT is payable if the chargeable consideration exceeds £250,000. Chargeable consideration is calculated on transfer of equity as follows:

The amount of debt transferred or taken on (the mortgage) plus the amount being paid for the equity.

If equity transferred is in a second property - for example, a holiday home or a buy-to-let - the SDLT threshold is £40,000.

What happens when there is a mortgage on the property being transferred?

If there is still an existing mortgage on the property when it is transferred, the person leaving the deeds will also need to be released from the mortgage and its terms and conditions. You cannot be removed from the deeds of the property without clearing or transferring the debt used to secure it initially.

Equity covers the percentage of your property you own. The rest will be owned by the bank or building society with which you have a mortgage and for that reason, you can’t release it without informing and agreeing the transfer with them.

Depending on the circumstances of your transfer of equity you can do the following if a mortgage is involved:

  • Pay off the mortgage (otherwise known as discharging which also refers to refinancing or filing for bankruptcy).
  • Obtain mortgage lender approval to transfer the property as part of a buyout – if the co-owner purchases your share of the property, for instance.
  • Re-mortgage the property to secure enough funds to pay off/discharge the current mortgage. For example, if you were separating with a partner.

When is Stamp Duty payable on a transfer of equity?

When you transfer equity from one person to another and the chargeable consideration exceeds the threshold, SDLT may be payable.

Even if the person receiving the equity already owns a share in the property, if the total chargeable consideration exceeds the threshold, SDLT will be payable.

Marriage, civil partnership, move in together

If you get married, enter a civil partnership or move in together, SDLT may be payable if you transfer equity and the chargeable consideration exceeds the SDLT threshold.

Transfer or divide up jointly-owned property or land: unmarried couples and other joint owners

If joint owners are unmarried and not in a civil partnership when they transfer an interest in land or property from one joint owner to another, then you may have to pay Stamp Duty Land Tax.

If you transfer land or property to or from a company

When property is transferred to a company, Stamp Duty Land Tax may be payable on its market value, not the chargeable consideration given.

When is SDLT NOT payable on transfer of equity?


You do not pay Stamp Duty Land Tax if you transfer an interest in land or property to your partner as part of an agreement or court order because you’re either:

  • divorcing.
  • dissolving a civil partnership.

This also applies if the partners either:

  • annul their marriage.
  • legally separate.

Gifting a property

You can transfer equity as a gift. This means a transfer occurs without any money changing hands. For example, parents or grandparents can gift equity in property or land to their children or grandchildren.

If you gift a property to another individual for example a family member, spouse or civil partner there is no chargeable consideration, SDLT is not payable.

You are left a property in a will

If you receive a property (or share in a property) in a will, and no payment is made for the share, there is usually no SDLT to pay. Even if you take over the mortgage from the date the person died, there will be no SDLT to pay.


Equity transfer can happen for all sorts of reasons, whether it’s a marriage legally separating, divorce, new civil partnership or marriage, family members being passed equity, tax purposes for IHT planning, or a new person taking ownership in a new relationship.

How you transfer equity and whether stamp duty land tax is payable on transfer will depend on the circumstances involved. There are further considerations if there is mortgage debt on the property as well. For these reasons, it’s wise to seek professional advice before making a transfer of equity.

For tailored tax advice on SDLT and property transfer or equity transfer, contact our expert team today. You can contact our team on 03300 886 686, or email on info@dnsaccountants.co.uk.

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About the author
Blog Author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.

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About the author
Blog Author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.


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