Transferring your beneficial interest in property is common between spouses and civil partners, especially when looking to utilise each other's income tax free allowance (read our other article on Capital Gains Tax on Property for Married Couples). What you may not know is that although you may have paid all of your stamp duty land tax when you purchased the property, if you are transferring equity to your spouse and no money is changing hands, you may still have to pay stamp duty if you have a mortgage. The reason for this is that stamp duty land tax is payable on the consideration and as you'll find out below, the taking on of more of the mortgage debt for tax purposes, is classed as consideration and as such stamp duty is payable at the prevailing rate.

The stamp duty on transfer of property between spouses changed on the 22nd November 2017 in relation to the additional rate of stamp duty, however there still could be stamp duty to pay. In this article we explain the stamp duty liability where a husband or a wife owns a property solely and is looking to complete a transfer of equity to jointly own the property with their spouse. There are other ways of sharing the beneficial ownership which we explain here - How to transfer ownership of property to your wife or husband

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

This also applies if the partners either:

In these cases there’s no need to tell HMRC about the transfer, even if the value is more than the Stamp Duty Land Tax threshold.

In all other cases, stamp duty land tax is payable on the total consideration being paid which is set out within the Finance Act 2003, Schedule 4, Stamp duty land tax: chargeable consideration. Consideration can be cash changing hands or the taking on of a debt (such as a mortgage or personal loan). To work out the total consideration you add the cash/money being paid for the share of the property being transferred and the new owner’s share of the existing mortgage/loan debt. If the total consideration exceeds the stamp duty threshold, then stamp duty is payable at the prevailing rate.

The payment (consideration) can take the form of cash, the giving of goods (giving a personal possession in exchange for the land/property), providing works or services (giving work or a service in exchange for the land or property), release from a debt, transfer of a debt, including the balance of an outstanding mortgage.

For example, Kelvin owns a property and wants to add on his wife Janet. Janet is not paying any money for her share of the property. The existing mortgage on completion is £300,000 and neither Kelvin or Janet own a beneficial interest in any other property.

In the example above the figure used for consideration to calculate the stamp duty payable is £150,000. You can find out how much stamp duty Janet and Kelvin have to pay by using the button below.