Stamp Duty on Divorce: When Is SDLT Due on a Transfer of Equity? (2026)

The General SDLT Rule on Property Transfers

Stamp Duty Land Tax is normally due on the "consideration" given for a property — most commonly cash paid, but also including any mortgage debt assumed by the person receiving a share of the property. If one partner in an unmarried couple transfers a half-share of a mortgaged £400,000 property to the other, the receiving partner is typically treated as having "paid" half the outstanding mortgage balance, which can trigger an SDLT charge if that figure exceeds the nil-rate threshold.

Divorcing and separating spouses (and civil partners) benefit from a specific statutory exemption that removes this charge in most circumstances.

When the Divorce Exemption Applies

HMRC's exemption covers property transferred between spouses or civil partners:

• Under a court order made in connection with divorce, dissolution of a civil partnership, judicial separation or annulment
• Under a written agreement made in contemplation of one of the above, even before the court order is finalised — this covers many consent orders and separation agreements agreed as part of the legal process

In both cases, no SDLT is due on the transfer, regardless of any mortgage debt assumed by the receiving spouse. This is a significant exemption, because in a purely commercial transfer of equity (say, between unmarried partners or family members), taking on a share of a mortgage would normally count as consideration and could trigger a real SDLT bill.

When SDLT Can Still Apply

The exemption is specifically tied to the divorce or separation process — it is not a blanket exemption for any transfer between people who happen to be married or separating. SDLT can still apply where:

• The transfer happens outside the formal divorce/separation process — for example, an informal arrangement between partners who have separated but have no court order or written separation agreement in place, and no divorce proceedings underway
• A third party is involved — if the family home is sold to someone outside the marriage as part of the settlement, that sale is a normal property transaction subject to standard SDLT rules
• Additional property is purchased as part of the settlement — if one spouse uses their share of proceeds to buy a new property while still legally owning (or having an interest in) another, the 5% additional property surcharge may apply to that new purchase, separately from the exempt transfer of the original home

Interaction with the Second Home Surcharge

Because the transfer of the family home itself is exempt from SDLT under the divorce provisions, the 5% additional property surcharge — which normally applies when the person receiving a property already owns another — does not apply to this specific transaction either. However, if either spouse subsequently buys a further property while still retaining an interest in the family home (for example, before it is sold or fully transferred), that separate purchase is assessed under the normal rules, including the surcharge if applicable.

Practical Steps

Anyone transferring property as part of a divorce or separation should:

1. Ensure the transfer is documented as connected to the divorce, dissolution or judicial separation — ideally via a court order or formal written agreement
2. Keep evidence of the timeline (when proceedings started, when any separation agreement was signed) in case HMRC queries the exemption later
3. Take advice on any subsequent property purchases, since the surcharge and standard SDLT rules apply in full to transactions outside the specific exempt transfer
4. Still submit an SDLT return if required, even where no tax is due, as HMRC may require a nil return depending on the transaction's structure — a conveyancing solicitor will confirm this for the specific case