Stamp Duty on Transfer of Equity: Rates, Exemptions and Calculator

When you change the legal ownership of a property by adding or removing someone from the Title (a Transfer of Equity), Stamp Duty Land Tax (SDLT) in England and Northern Ireland or Land Transaction Tax (LTT) in Wales may be payable.

Unlike a standard property purchase, where tax is calculated on the purchase price, Transfer of Equity tax is generally calculated by reference to the chargeable consideration. This can be the cash paid for the share being transferred and, in some cases, mortgage debt taken on by the incoming owner. Certain transfers made as part of a divorce, separation or the end of a civil partnership can have different tax treatment.

In this guide, we explain when stamp duty applies to a Transfer of Equity, how the tax is calculated, when an exemption may apply and what you need to do to report and pay it.

Stamp Duty on a Transfer of Equity

Stamp Duty Land Tax (SDLT) can apply when an interest in land or property is transferred in return for chargeable consideration. This includes transfers of equity.

A Transfer of Equity changes who owns an interest in a property. It can involve adding or removing an owner, changing the ownership shares or transferring an interest as part of a financial settlement.

For SDLT purposes, the key question is whether the incoming owner gives chargeable consideration for the interest they acquire. This can include money paid to another owner and, in some circumstances, responsibility for an existing mortgage.

If there is no chargeable consideration, SDLT will generally not be payable. However, specific rules apply to situations such as transfers between spouses or civil partners, divorce and separation, gifts, inherited property and transfers involving companies.

In Wales, the equivalent tax is Land Transaction Tax (LTT). LTT has different rates, thresholds and higher-rate rules, so you need to check the Welsh rules separately rather than applying the SDLT rates.

The rate of payable stamp duty differs for properties in England and Wales. The following table shows the current SDLT rates for England. SDLT is calculated on a tiered basis, meaning different portions of the consideration are taxed at different rates. You only pay the higher rate on the portion of the consideration that falls within that band.

When buying someone out of jointly owned property, you should factor any SDLT or LTT due into the overall cost of the transfer.

What is chargeable consideration on a Transfer of Equity?

Chargeable consideration is the value on which Stamp Duty Land Tax (SDLT) is calculated in a transfer of equity. The concept of chargeable consideration is set out in the Finance Act 2003.

Consideration can be:

• Capital payment: Any cash payment made by the incoming owner to the outgoing owner for their share of the property.
• Mortgage assumption: The relevant portion of an existing mortgage that the incoming owner takes responsibility for as part of the transfer.

To calculate the chargeable consideration, add any money paid to the amount of relevant debt assumed by the incoming owner. Whether SDLT or LTT is payable then depends on the applicable rates, thresholds and circumstances of the transaction. The property's overall market value is not normally the starting point for a straightforward transfer of equity.

How does mortgage debt affect the tax?

You may have to pay SDLT or LTT on a Transfer of Equity even when no money changes hands. This can happen when the incoming owner takes responsibility for some or all of an existing mortgage.

The amount treated as chargeable consideration depends on the circumstances of the transfer, including the relevant ownership interests and the amount of mortgage debt for which the incoming owner becomes responsible.

This means you should not assume that a Transfer of Equity is automatically exempt simply because no cash is changing hands.

What are the SDLT and LTT rates?

The rate of tax depends on where the property is located.

• England and Northern Ireland: Stamp Duty Land Tax (SDLT) applies.
• Wales: Land Transaction Tax (LTT) applies.

The amount of tax depends on the Chargeable Consideration and the circumstances of the incoming owner.

England and Northern Ireland: SDLT rates

For residential property in England and Northern Ireland, the standard SDLT rates from 1 April 2025 are:

Higher SDLT rates for additional properties

Higher SDLT rates may apply where the incoming owner acquires an interest in a residential property worth £40,000 or more and will own more than one residential property as a result of the transaction, unless an exception applies. However, the higher rates do not automatically apply simply because someone involved in the transfer of equity owns another property.

There are exceptions and special rules, including rules relating to spouses and civil partners and transfers involving an individual's existing main residence. The position, therefore, needs to be checked based on who is acquiring the interest and what residential property they already own.

If the incoming owner is a qualifying non-UK resident, a further 2 percentage points can be added to the applicable residential SDLT rates.

From 1 April 2025, the higher residential rates are:

Wales: LTT rates

If the property is in Wales, you pay Land Transaction Tax (LTT) rather than SDLT. LTT has its own rates and higher residential rates, so the SDLT thresholds and surcharges in the sections above do not apply.

For a straightforward Transfer of Equity, LTT is generally calculated by reference to the chargeable consideration given for the interest being acquired. This can include money paid and, where applicable, mortgage debt assumed by the incoming owner.

Higher residential LTT rates may apply where the incoming owner already owns one or more residential properties and the transaction meets the relevant conditions. Wales also has specific rules for certain transfers connected with divorce, dissolution of a civil partnership and separation.

The current residential LTT rates are:

When is Stamp Duty exempt on a Transfer of Equity?

You do not always have to pay SDLT or LTT on a Transfer of Equity. The tax treatment depends on the reason for the property transfer and whether there is any chargeable consideration.

Gifts with no chargeable consideration

If the transfer is a genuine gift and the incoming owner gives no chargeable consideration, SDLT will generally not be payable. However, taking on responsibility for an existing mortgage can create chargeable consideration, meaning a transfer described as a “gift” may still result in SDLT.

For example, if a property is gifted with no cash payment but the incoming owner takes responsibility for £150,000 of an existing mortgage, that mortgage assumption can be chargeable consideration.

Divorce, separation or the end of a civil partnership

There are specific SDLT rules for transfers made because of divorce, dissolution of a civil partnership, annulment or legal separation. You do not pay SDLT where an interest in land or property is transferred to a spouse or civil partner as part of an agreement or court order because the couple are divorcing, dissolving their civil partnership or legally separating. HMRC also says that these qualifying transfers do not need to be reported.

Wales has separate rules for certain transfers connected with the end of a marriage or civil partnership. Some transactions made under a qualifying court order, agreement or separation arrangement can be exempt from LTT. There are also specific rules affecting the higher residential rates.

Property inherited under a will

If you receive property under the terms of a will, you do not normally pay SDLT and do not need to tell HMRC about the transaction. This can apply even where you take on an outstanding mortgage on the property at the date of death, provided no other chargeable consideration is given.

If you later transfer an interest in the inherited property to someone else, that is a separate transaction and may have different SDLT or LTT consequences.

Adding someone to a property: when is tax payable?

Adding someone to the deeds is a common reason for a Transfer of Equity. Whether SDLT or LTT is payable depends mainly on what the incoming owner gives in exchange for the interest they acquire.

If the incoming owner pays cash or assumes relevant mortgage debt, there may be chargeable consideration and tax may be payable. The position is different where the interest is genuinely gifted without chargeable consideration.

The position can also be affected by the incoming owner's existing property ownership, the reason for the transfer and whether any specific relief or exemption applies.

Do you pay Stamp Duty when removing someone from a property?

Removing someone from the deeds can create a Stamp Duty liability. For example, if two people own a property equally and one person transfers their entire share to the other. The remaining owner may have chargeable consideration consisting of:

• any cash paid for the outgoing owner's share
• outgoing owner's relevant share of the outstanding mortgage

Therefore, if two people jointly own a property with a £200,000 mortgage. One owner becomes the sole owner, pays £175,000 for the other person's share of the equity and takes responsibility for the other person's £100,000 share of the mortgage.

The total chargeable consideration is therefore £275,000. This can result in SDLT being payable depending on the applicable rates and whether any higher-rate rules apply.

When do you need to report and pay the tax?

In England and Northern Ireland, an SDLT return and any tax due generally need to be dealt with within 14 days of the transaction's effective date. The effective date is usually the completion date, although different rules can apply where a transaction is substantially performed earlier.

In Wales, an LTT return and any tax due are generally due within 30 days beginning on the day after the transaction's effective date.

Your conveyancer will usually prepare and submit the relevant tax return and arrange payment as part of the Transfer of Equity.

Common Stamp Duty mistakes to avoid:

There are several potential tax issues to consider when transferring property ownership. These can include:

• Assuming no cash means no tax: Mortgage debt assumed by the incoming owner can count as chargeable consideration.
• Using the wrong rates: SDLT applies in England and Northern Ireland, while LTT applies in Wales. Their rates and rules are different.
• Assuming an exemption applies: Divorce, separation, gifts and inheritance can have special tax treatment, but specific conditions may need to be met.
• Missing the reporting deadline: SDLT is generally due within 14 days of the effective date, while an LTT return is generally due within 30 days beginning the day after the effective date.

Could Capital Gains Tax also apply?

Stamp Duty is not the only tax that may need to be considered when completing a Transfer of Equity. Capital Gains Tax (CGT) may be relevant where an interest in a property is transferred, particularly if the property is a buy-to-let, second home or another property that does not qualify fully for Private Residence Relief.

CGT is generally based on the gain arising from the interest being transferred, taking into account factors such as the original acquisition cost, allowable expenses and any available reliefs. Transfers between spouses and civil partners can qualify for special no-gain/no-loss treatment, but the rules depend on the circumstances and, for separated couples, when the transfer takes place.

If CGT is due on a UK residential property disposal, it generally needs to be reported and paid to HMRC within 60 days of completion. If you are unsure whether CGT applies to your Transfer of Equity, speak to a tax adviser before the transfer takes place.

Need help calculating Stamp Duty on your Transfer of Equity?

Working out the SDLT or LTT on a Transfer of Equity can be complicated, particularly when mortgage debt, additional properties or an exemption is involved. Our specialist conveyancing solicitors can assess the chargeable consideration, deal with the relevant tax paperwork and complete the legal transfer for you.