SDLT on transfer of equity to partner

[Litchy1986]

Hi all, i'd like a bit of advice on transferring partial ownership of a property (50%) to my partner (we are not married, but have been cohabiting for several years).
The property is not our main residence.
The property is valued at C.£300K.
There is an outstanding mortgage (in my name) of £168K.
If she were to take a share of the property, it would be 50% value, 50% mortgage. this would equate to an equal share value of £150K.
my questions are:
Does it matter we arent married / in an "official" partnership?
On what amount would she pay SDLT?
would this be different if it were our main residence?
How would the mortgage be dealt with? would it be a case of adding her name to the existing mortgage (is that a thing?) or would there be a requirement for a new joint mortgage? (harder to answer i guess - i should check this with my mortgage provider).

Many thanks in advance!

[someone]

Not married: Yes, it matters. You will have to pay CGT on any increase in value of the share you gift (probably approximately 150K less half the purchase price). If you've ever lived there as your main home then it's more complicated.
SDLT - this is paid on consideration, which in this case will be half the outstanding mortgage (84K) and, assuming your partner owns another property, will be charged a the second home rate.
Doesn't matter if it's your main residence, what matters is how many properties the "purchaser" owns. As you are not married only properties owned by your partner matter.
Mortgage: You will get a new mortgage but most likely, this will replace your existing mortgage "as is" - i.e, you'll get the same rate, remaining term, repayments, conditions etc and won't have to pay early repayment fees so it will feel like it's just adding a name to the existing one (I don't know if it's a legal requirement to have a new mortgage but in practice this appears to be what the banks do)

FWIW, this sort of transaction is called a "transfer of equity" and if you tell your mortgage provider this is what you want to do they'll be able to tell you exactly what is needed and what fees they'll charge. (They won't advise you on tax issues though and nor will most solicitors)

If this is so you can split rental income, then you can avoid the SDLT and CGT by gifting 1% to your partner but still transferring into joint names. Now the rental income will be shared 50/50 (unless you submit form 17 to HMRC). Any solicitor should be able to arrange this - from the bank's POV it's exactly the same as transferring 50%

[Litchy1986]

Thanks so much, thats really useful.

If we were married, or in a civil partnership, does that rule change?
I certainly wouldnt get married for this, but we are planning it at some point in the future anyway!
The property in question (now a BTL) was my main rersidence for 4 years, betwween 2016 and 2020.

And just to confirm, it doesnt matter whether its your primary residence, it is the fact at another property is owned at all that is the kicker for the additonal SDLT rate. (we figured that the " sell Primary residence and get new primary residence" might scoot round this, but it appears not by your response)

Many thanks!

[Litchy1986]

just to Add to this, the .gov website states the following:

You must pay the higher Stamp Duty Land Tax (SDLT) rates when you buy a residential property (or a part of one) for £40,000 or more, if all the following apply:

it will not be the only residential property worth £40,000 or more that you own (or part own) anywhere in the world
you have not sold or given away your previous main home
no one else has a lease on it which has more than 21 years left to run

in this instance, if we sell our main residence, but keep the BTL, we will not have done the second bullet point. the above implies that in that instance, having a BTL isnt really an issue, and wthe property will not attract the additional SDLT rate.

does this sound about right?

Thanks!