Stamp Duty on Transfer of Property Between Spouses
- Stamp duty is payable on the chargeable consideration, including cash paid and mortgage debt taken on in exchange for the transfer.
- You usually do have to pay stamp duty on transfer of property between spouses unless there is no consideration and no change in mortgage liability; or, if the transfer is part of a divorce, dissolution, separation or annulment.
- You may be able to avoid paying stamp duty if the person being added to the title pays nothing for the transfer and does not go on the outstanding mortgage.
- Since 2017, the additional stamp duty land tax rate on a second home will not apply so long as no one outside of the marriage or civil partnership has an interest in the property.
How to add your spouse to house deeds
The most common transfer of property between spouses happens when one spouse owns their own home before marriage and wants to give half the property to their partner. After marriage or civil partnership, you transfer half the shares in the property to your partner, so you both own the marital home.
This can be done very simply with a Transfer of Equity, which involves a TR1, ID checks, and some extra bits if there is a mortgage or leasehold involved.
Can I transfer ownership of a property to my wife?
Transferring more of your beneficial interest in the property is also common for couples who are already joint tenants on a rental property, looking to transfer rental income to the spouse in the lower income bracket, to pay less income tax.
Is CGT payable on transfer of property to spouse?
You don't have to pay Capital Gains Tax on a transfer between married couples, but you must complete Form 17 for HMRC.
This can be done with a severance of joint tenancy and deed of trust or deed of assignment. You may transfer up to 100% of the property for tax efficiency, but beware; if you separate, this is how the property will be divided in divorce.
Is there stamp duty on transfer of property between spouses?
Although you may have paid all of your stamp duty land tax when you purchased the property, generally, you still have to pay stamp duty if you have a mortgage, even where no money is changing hands. However, you may not have to pay the second home rate.
Stamp duty land tax is payable on the consideration paid in exchange for transferring equity, and, as you'll find out below, taking on a portion of the mortgage debt is classed as consideration. As such, stamp duty is payable at the prevailing rate. There are exemptions if you are divorcing or are legally separating.
Do you need help evidencing an unequal share of property for Income Tax purposes?
We specialise in the transferring of property between married couples for income tax purposes, and our solicitors can help you with:
- Drafting a deed of trust for Form 17
- Transfer of Equity to add a partner to the legal title
- Selling a property
Is there stamp duty on a second property for married couples?
The rules regarding the additional rate of stamp duty on a transfer of property between spouses changed on the 22nd of November 2017. The higher rates rules disregard transfers of interests between spouses or civil partners who are living together. However, the higher rate would still apply if you owned the transfer property jointly with a third party. If you sell the other property within 36 months of buying your new home, however, you may be able to claim a rebate on the additional rate paid.
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 in our article: How to transfer ownership of property to your wife or husband
What are the stamp duty exemption rules for a transfer of equity?
You don’t pay Stamp duty on transfer of property between spouses if it's done as part of an agreement or court order because you’re either:
- divorcing
- dissolving a civil partnership
This also applies if the partners either:
- annul their marriage
- legally separate
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.
What stamp duty is payable when transferring an interest in a jointly owned property?
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, 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: Ian owns a property valued £300,000 with a £275,000 existing mortgage. Jane, Ian's wife, is transferred onto the legal title. Jane owns 99% of the beneficial interest, and Ian owns 1%, and Jane doesn't pay Ian any money for her share. However, Jane takes on 99% of the existing debt (the mortgage on the property). Stamp duty land tax is payable on the consideration based on 99% of the existing debt of £275,000, which equates to £272,250 as she takes on 99% of the existing debt.
| Property Price | Standard Rate of Stamp Duty | Additional Home Rate (updated post Oct 2024 budget) | Non UK Resident Rate |
| £0 - £125,000 | 0% | 5% | 2% |
| £125,001 - £250,000 | 0% | 5% | 2% |
| £250,001 - £925,000 | 5% | 10% | 2% |
| £925,001 - £1.5 million | 10% | 15% | 2% |
| Over £1.5 million | 12% | 17% | 2% |
How much is chargeable if no money changes hands?
Stamp duty is payable if one of the parties is released of their share of the mortgage debt. Being released from being liable for debt is a consideration.
Go to the SDLT Manual - How much is chargeable: Non-cash consideration: Assumption or release of a debt.
HMRC example for additional stamp duty for spouses
"Mr Smith is transferring 50% of a buy-to-let property that he owns to his wife Mrs Smith. Mrs Smith is paying some cash and taking responsibility for half the mortgage debt. Mrs Smith owns no other residential property, but Mr Smith owns several other buy-to-let properties.
For transfers before 22 November 2017, the higher rates will apply to the transfer as Mr Smith owns other residential properties. As a married couple, other residential property owned by either spouse is taken into account in determining whether the higher rates apply.
For transfers on and after 22 November 2017, the higher rates rules disregard transactions solely involving the transfer of interests between spouses or civil partners while they are treated as living together on the date of purchase. ‘Living together` takes the definition in section 1011 of the Income Tax Act 2007. A married couple or civil partners of each other are treated as living together unless they are separated under an order of a Court, they are separated by a formal deed of separation, or they are separated in such circumstances that the separation is likely permanent.
If (before or after the transaction takes place) someone other than the spouses or civil partners has an interest in the property, the transaction will still count as a higher rates transaction. For example, a transaction would not be disregarded where an interest owned by a wife and her otherwise unrelated business partner is transferred to her husband."
- Get up-to-date property tax advice on SDLT, CGT, IHT, Personal versus partnership versus company structure.
- Free 15-minute initial consultation with a qualified accountant from our panel of tax advisors.
- Ask your tax questions and get guidance on what you can do next.
- If there is some further accountancy work required, then you'll be quoted for this as a separate piece of work with no obligation to purchase.
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
