I think it is helpful to add my contributions by putting notes after what maths has said.
1. It seems to me that you and your wife can be considered as "separated" en route, as it were, to full divorce.
I agree. That test needed to be satisfied as at the date of the recent purchase by Chris.
2. You and your wife agreed that you would transfer your 50% in the marital home to her in exchange for a proportion of the monies in a joint bank account. The 50% transferred was a beneficial (not legal) interest in the home.
A beneficial interest can only be transferred by a document in writing signed by the transfer. See Law of Property Act 1925 section 53 (1)(c). It is not enough to later evidence it in writing, the assignment itself must be in writing.
3. The legal interest is required to remain in both your and your wife's names as you are both parties to the mortgage.
4. It is however possible to be a party to the legal title (which you are) but at the same time own 0% of the beneficial interest which arose following the agreed transfer in point 2 above.
Agreed, though formalities are required to transfer the share in the property.
5. It seems that despite this agreement the change in beneficial interests were not updated; this does not mean however that you did not transfer your 50% which prima facie you clearly did.
That depends on whether the formalities for the assignment of a beneficial interest were complied with by the time of the purchase of the new home. That seems a little unlikely. Because Chris remained liable on the mortgage, he might well have wanted to retain a share in the property so as not to be exposed to a debt without a corresponding asset.
6. For SDLT purposes no charge arises on the transfer of your 50% to your wife in exchange for cash as the "exchange" is part of the dissolution or separation between the two of you (even though the home is mortgaged).
That is right, if pursuant to an agreement in contemplation of divorce.
7. The issue re SDLT therefore relates to your own purchase.
8. On your purchase it seems that at the date of "completion" you did not in fact have any beneficial interest in any other property; by this time, your 50% in the marital home had already been transferred to your wife. Thus, the 3% charge would not apply to your purchase.
This depends on whether the formalities needed for a transfer of the beneficial interest were followed. It seems rather unlikely to me from what is said.
9. The issue seems to be one of evidence and practicality. The transfer of your 50% beneficial interest only requires to be evidenced in writing (and presumably although preferably at the time the agreement was made). Either your agreement was documented at the time or it was at that time a purely verbal agreement. Assuming the latter, then some form of document could now be prepared recounting the facts including the agreement to transfer your 50% as from the date it was agreed; the document would be dated today (ie cannot back date).
If the beneficial interest was transferred before the purchase of the new home, then all should be well and good. But the assignment needs to be made in writing, it is not enough to later evidence it in writing. Assuming Chris had successfully assigned his share and had no other property interests then the bare legal estate in the former matrimonial home would be worth under £40,000 and so Condition C would be failed. That would mean that the 3% surcharge was not due on the purchase.
But it is tougher if a beneficial share was still held on the date of the recent purchase. One of the conditions to later come within Condition D (the replacement exception) is that all of the interest, both legal and beneficial, in the old home is disposed of within three years. Chris seems unable to achieve this, because of the lender's requirements. So it would be difficult to qualify for a refund of the extra 3% SDLT by later divesting himself of his interests in the former matrimonial home.