Stamp Duty Land Tax on Land and Property Transfers

When you buy a property, you usually hear about Stamp Duty Land Tax (SDLT) as a tax you need to pay. But SDLT is not just for buying homes; it can also apply when you transfer ownership of land or property in other ways.

Whether you are changing names on the title, passing property to family, or handling shared ownership, it’s important to know when transfer of property triggers SDLT.

This guide explains how transfer of equity stamp duty, stamp duty on transfer of equity, and sdlt transfer of equity work, so you understand your tax responsibilities clearly and simply.

Do You Pay SDLT on Property Transfers?

You may need to pay Stamp Duty Land Tax (SDLT) if ownership of land or property is transferred to you and you provide any form of payment or consideration in return. Giving anything with monetary value or taking on debt, such as a mortgage, is called chargeable consideration.

Knowing the rules for SDLT is especially important during a transfer of equity. Stamp duty on transfer of equity is payable if the amount transferred (in money or mortgage liability) exceeds the current SDLT threshold. This situation is commonly called an sdlt transfer of equity.

What is Chargeable Consideration?

Most property transactions involve payment, but you can also acquire property by giving something else of value, in some cases, by taking on debt like a mortgage. This is known as chargeable consideration and directly affects the SDLT payable on the transfer of property.

For more details on chargeable consideration, see HMRC’s official guidance.

Is Stamp Duty Payable When Gifting a Property?

Stamp Duty Land Tax (SDLT) is not charged on a property that is given as a gift, as long as no payment or other ’chargeable consideration’ is involved in the transfer. The person gifting the property also isn’t liable for SDLT since it only applies when property is purchased or received in exchange for cash or other chargeable consideration.

SDLT When Transferring Ownership of Land or Property

• If you marry, enter a civil partnership, or set up home together: A transfer of equity to a spouse or civil partner may attract transfer of equity stamp duty if the consideration exceeds the SDLT threshold.
• Divorce, separation, or dissolution of a civil partnership: Transfers under a court order do not require notification to HMRC and usually do not incur SDLT, even if above the current threshold.

Joint Owners and SDLT

If you are joint owners, SDLT may be payable when you transfer or divide up interests in property or land. Joint owners not in a civil partnership should consider SDLT rules before transferring ownership.

If one person takes a larger share in exchange for cash, mortgage debt, or other consideration, they may need to file an SDLT return with HMRC and pay stamp duty on transfer of equity if the amount exceeds the SDLT threshold.

Taking a larger share of jointly owned property as a gift with no consideration does not usually trigger SDLT or reporting.

Transfer of Outstanding Mortgage Debt

If joint owners agree that one person will take over ownership and assume the mortgage, that person will pay SDLT on both any cash payment and the proportion of the mortgage owed if the total exceeds the SDLT threshold. This scenario is an example of an SDLT transfer of equity.

Inheriting Property

You won’t pay SDLT on inherited property, even if you take on an existing mortgage, as long as no other chargeable consideration is given.

Transferring Property Into a Limited Company

If you transfer a privately owned property into a company, SDLT may be calculated on the market value of the property, not just the chargeable consideration given. This is relevant to transactions involving connected parties or company share transfers.

Read more about transferring property into a limited company.

SDLT and the Transfer of Equity Threshold

Currently, the SDLT threshold for a transfer of equity is £125,000 (effective from April 2025). This means you only pay SDLT if the total chargeable consideration, which includes cash paid plus any mortgage debt taken on, exceeds this amount. If it is, SDLT is charged at different rates on the amount above £125,000.

For example, if you take on a mortgage of £150,000 as part of the transfer, you will pay SDLT on £25,000 (the amount over the threshold). If the transfer is part of a divorce or a gift that involves no payment or mortgage, SDLT usually does not apply.

Family Transfers

Whether stamp duty on transfer of equity is payable between family members depends on marital status, relationship, and the amount transferred. Transfer of property to children or other family members may be subject to SDLT if the equity or mortgage exceeds the applicable threshold.

Find out more about gifting property to children.

Conclusion

Transferring ownership of land or property, whether as a gift, inheritance, or transfer of equity, can impact your SDLT liability. Knowing rules on transfer of property, transfer of equity stamp duty, and SDLT thresholds helps you avoid errors and comply with HMRC’s requirements. For advice on SDLT, equity transfer or property gifting, contact dns accountants for efficient solutions.

Contact our property and tax team for help with any sdlt transfer of equity or stamp duty on transfer of equity. Call us on 03300 886 686 or email [email protected].

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About the 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.