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Stamp duty on a transfer of equity
When a share of a home changes hands between owners, the tax looks at the money paid and at the debt that moves with the share.
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A transfer of equity is taxed on its chargeable consideration: the cash paid to the other owner plus the share of any mortgage the new owner takes on. Adding a partner to the title of a house with a £300,000 mortgage, where they become liable for half of it, is a purchase for £150,000, which costs £500 of SDLT in England, £100 in Scotland and £0 in Wales. Buying out a former partner for £60,000 and taking over their half of a £200,000 mortgage means a consideration of £160,000, or £700 of SDLT. Nothing is due, and no return is needed, when a share is given with no money and no mortgage taken on, or when the transfer is made under a divorce or dissolution settlement. If the person receiving the share owns another home, the surcharge can apply, except between spouses and civil partners.
Chargeable consideration £120,000 · Stamp Duty Land Tax
£0
Rule applied: Standard residential rates
No tax and no return when nothing is paid and no mortgage is taken on, or when the transfer follows a divorce or dissolution order.
What counts as the price
There is no purchase price on a transfer of equity, so the tax builds one from what the new owner gives up or takes over. Cash paid to the person leaving or reducing their share counts in full. A mortgage counts in proportion to the share of it that the new owner becomes liable for: joining a joint mortgage for half of the debt means half of the outstanding balance. The value of the property is irrelevant; a half share of a £600,000 house transferred with no cash and no debt has a consideration of nothing.
| Case | Consideration | England & NI | Scotland | Wales |
|---|---|---|---|---|
| Partner added, takes on half of a £300,000 mortgage | £150,000 | £500 | £100 | £0 |
| Buy-out: £60,000 cash and half of a £200,000 mortgage | £160,000 | £700 | £300 | £0 |
| Parent adds a child, no cash, half of a £100,000 mortgage | £50,000 | £0 | £0 | £0 |
| Gift of half a house with no mortgage | £0 | £0 | £0 | £0 |
When the debt taken on is a fraction of the value of the house, the consideration can stay inside the nil band: £125,000 in England, £145,000 in Scotland, £225,000 in Wales.
When the surcharge applies
A transfer is a purchase of a share of a dwelling, so the person receiving it is tested like any other buyer. If they own another home that they keep, the higher rates apply to the consideration: £8,000 instead of £500 in the first case of the table. Transfers between spouses or civil partners are kept out of the surcharge, so a wife added to her husband’s house pays at most the ordinary rates on her share of the mortgage.
Exempt transfers
Two situations are exempt and need no return at all: a genuine gift, where the new owner pays nothing and takes on no debt, and a transfer between spouses or civil partners under a divorce or dissolution arrangement. Both are listed by HMRC among the land and property transfers that carry no SDLT. The exemptions guide covers the full list.
Filing the return
When tax is due on a transfer, the return and the payment follow the deadlines of an ordinary purchase: 14 days after the effective date for SDLT and 30 days for LBTT and LTT. Late filing of an SDLT return brings a fixed penalty of £100, rising to £200 for a longer delay, plus interest on any tax paid late. A transfer is a land transaction like any other in this respect, even between members of the same family.