Answers · UK 2025/26

Do you pay Stamp Duty on a transfer of equity?

Stamp Duty Land Tax is only due on a transfer of equity if "chargeable consideration" is given in exchange -- typically cash paid to the outgoing owner, or the value of mortgage debt the remaining or new owner takes on. Transfers with no consideration at all (a pure gift of a share in an unmortgaged property) generally attract no SDLT, but taking on a share of mortgage debt almost always counts as consideration.

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Full answer

A transfer of equity is the legal process of changing who owns a share in a property without a full sale -- for example, adding a spouse to the title, removing an ex-partner, or gifting a share to a family member -- and whether Stamp Duty Land Tax applies depends entirely on whether 'chargeable consideration' changes hands. **What counts as chargeable consideration** Chargeable consideration is not limited to cash payments -- critically, it also includes the value of any mortgage debt that the person receiving a share of the property takes on or becomes liable for as part of the transfer. This is a commonly misunderstood point: even where no cash at all changes hands, taking on a share of an existing mortgage is treated as consideration for SDLT purposes. **A worked example of the mortgage debt trap** If a homeowner with an outstanding £200,000 mortgage adds their partner to the title as a 50% joint owner, and the partner becomes equally liable for the mortgage, HMRC treats the partner as having given consideration equal to 50% of the outstanding mortgage debt (£100,000 in this example) even though no cash has been paid to anyone -- if this figure exceeds the relevant SDLT nil-rate threshold, SDLT could become payable on this notional consideration. **When no SDLT is due** If a property has no mortgage at all (owned outright) and a share is gifted with genuinely no consideration of any kind -- no cash, and no debt being taken on -- then no SDLT is due on the transfer, since there is no chargeable consideration for the tax to bite on. **Divorce and civil partnership dissolution exemption** Transfers of equity made specifically pursuant to a court order or a formal written agreement in connection with divorce, judicial separation, or dissolution of a civil partnership are exempt from SDLT, regardless of how much consideration (cash or mortgage debt) is involved -- this specific exemption does not automatically extend to unmarried, cohabiting couples separating informally without such a formal order or agreement. **Additional property surcharge considerations** If the person receiving a share in the transfer already owns another residential property, and the SDLT chargeable consideration is high enough to be relevant, the usual additional property 5% surcharge rules could in principle apply to a transfer of equity in the same way as to any other residential property transaction, though this needs checking against the specific facts and any relevant reliefs. **Worked example -- adding a spouse to an unmortgaged property** A person who owns their home outright (no mortgage) wants to add their spouse to the title as a joint 50% owner as a gift, with no cash paid and no mortgage debt for the spouse to take on. Because there is no chargeable consideration at all, no SDLT is due on this transfer, even though legal ownership has genuinely changed. **Worked example -- adding a partner where a mortgage exists** By contrast, adding an unmarried partner to a title where there is an outstanding £150,000 mortgage, with the partner taking on 50% liability (£75,000 notional consideration), could potentially trigger SDLT on that £75,000 figure if it exceeds the relevant nil-rate threshold applicable to the transaction -- unlike a formal divorce transfer, there is no automatic exemption simply because the couple are partners rather than legally married. **Practical tip** Always get a solicitor to check the specific SDLT position on any transfer of equity, especially where a mortgage is involved, since the mortgage debt consideration rule catches many people by surprise, and the divorce exemption only applies to formally documented court orders or separation agreements, not informal arrangements.