From 1 April 2025, the standard residential SDLT nil-rate band is £125,000. Higher rates for additional residential properties are generally 5 percentage points above the standard residential rates. A transfer of equity can still create an SDLT charge where the incoming owner takes on mortgage debt or gives other chargeable consideration, so the tax position should be checked before the transfer is completed.
If you’ve bought a property at some point in your life then you will be familiar with the term stamp duty (or Stamp Duty Land Tax ( SDLT ) as it is known in full). Even if you haven’t, I’m sure most people have at least heard of it.
SDLT is paid when purchasing residential properties over £125,000. But what is less well known is that you may need to pay SDLT when transferring the ownership of a property to another person in exchange for a monetary value (called ‘consideration’ by HM Revenue and Customs).
There are a number of factors that can affect whether SDLT is applicable, including whether the transfer is a gift, what the total value of the transfer is and who will be responsible and liable for paying the mortgage.
This final factor is an important one. The transfer of a share of the mortgage can be treated as ‘consideration’ for SDLT purposes and can give rise to an immediate tax charge.
Don’t get caught out by Stamp Duty Land Tax when transferring property between joint owners.
If the person who is giving the property retains the liability for the mortgage then it is possible to reduce or eliminate the SDLT charge and we can advise you on whether this is possible for your transfer.
What is the threshold of SDLT for transfer of ownership?
While SDLT must be reported to HMRC if the ‘consideration’ is more than £40,000, SDLT will not start to become payable on residential property until the ‘consideration’ exceeds £125,000.
For example, if a buy-to-let property has a substantial mortgage and the ownership shares change, the amount of mortgage debt assumed by the incoming owner can count as consideration. The amount of SDLT will depend on the consideration, the residential rates in force and whether the higher rates for additional properties apply.
More information
The HM Revenue and Customs website explains in more detail what Stamp Duty Land Tax is and what this means for joint ownership, If you have questions about a proposed transfer, obtain advice from a conveyancing solicitor or tax adviser before completion.
Useful UK legal and solicitor links
- GOV.UK: Residential SDLT rates
- GOV.UK: SDLT on land and property transfers
- Moore Barlow: SDLT and debt secured against property
This article provides general information only and is not a substitute for legal or tax advice on a specific case.
