Stamp Duty on Transfer of Equity (2026): When You Pay & When You Don’t
Adding a partner, buying out an ex, or gifting a share? The good news: stamp duty on a transfer of equity is charged on the mortgage debt taken on, not the property’s value — so it’s often zero or small. But there are traps that catch people out. Here’s exactly how it’s calculated.
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Quick answer
On a transfer of equity, stamp duty (SDLT) is charged only on the “chargeable consideration” — the value the person gaining a share actually gives, which means any cash they pay plus the share of the mortgage debt they take on. Crucially, it is NOT charged on the property’s value or on the equity — only on the debt assumed (plus any cash). Because of this, many transfers of equity attract little or no stamp duty. For example, if you add a partner to a home with a £300,000 mortgage and they take on 50%, they assume £150,000 of debt, and SDLT on £150,000 is just £500 (2% on the slice above £125,000). If the debt they take on is below the £125,000 threshold, there’s no SDLT to pay at all. There are important exceptions: transfers between spouses or civil partners as part of a divorce, dissolution or court-ordered separation are generally exempt entirely; a genuine gift with no mortgage and no cash has no chargeable consideration and no SDLT; but an unmarried person taking on a share who already owns another property can be hit with the 5% additional-property surcharge on the whole consideration. An SDLT return is generally required whenever the consideration is £40,000 or more, even if no tax is due. This is general information, not tax advice. As of August 2026.
In this guide
What a transfer of equity is
A transfer of equity is the legal process of changing who owns a property while at least one original owner stays on the title. It’s not a full sale — one or more people are added to or removed from the ownership. Common situations include adding a spouse or partner to the deeds, removing an ex-partner after a separation, buying out a co-owner, or gifting a share to a family member such as a child. Because it isn’t a full purchase, a transfer of equity is usually cheaper and quicker than buying a property outright, but it’s still a legal transaction: you need a conveyancer to handle the transfer and register the change with HM Land Registry, and if there’s a mortgage, the lender must consent — and the remaining owner(s) must prove they can afford it (sometimes via a joint borrower sole proprietor arrangement). The question that catches most people out is stamp duty, because the rules are completely different from a normal purchase. Many assume that because no property is being “bought” in the usual sense, no stamp duty can apply — but that’s not quite right, as we’ll explain.
The key concept: chargeable consideration
Stamp duty is charged on the debt taken on — not the property’s value
This is the single most important thing to understand, and it’s what makes transfer-of-equity stamp duty so different from a normal purchase. SDLT is charged on the “chargeable consideration” — which HMRC defines as anything of monetary value the incoming owner gives in exchange for their share. In a transfer of equity, that means:
Cash paid for the share + share of mortgage debt taken on = chargeable consideration
The vital point: it is calculated on the consideration, not the market value of the property or the equity. Even when no cash changes hands, HMRC treats the assumption of mortgage debt as consideration — this is confirmed in HMRC’s own manual (the assumption of liability for existing debt is chargeable consideration for SDLT). So if you take on a share of a mortgage, you’ve given “consideration” in HMRC’s eyes, even if you paid nobody a penny. The standard residential SDLT bands then apply to that consideration figure: 0% up to £125,000, 2% from £125,001 to £250,000, and 5% from £250,001 to £925,000. Because the consideration is usually just a share of the mortgage — often well below the property’s value — the resulting SDLT is frequently zero or small.
Worked examples
Here’s how the calculation works across the most common scenarios (standard residential rates, no surcharge):
| Scenario | Consideration (debt assumed) | SDLT |
|---|---|---|
| Add partner, £200k mortgage, 50% share | £100,000 | £0 |
| Add partner, £300k mortgage, 50% share | £150,000 | £500 |
| Partner takes on full £300k mortgage | £300,000 | £5,000 |
| Buyout, taking on £350k of mortgage | £350,000 | £7,500 |
Take the £300,000 debt-assumed example (the one in HMRC’s own guidance): the incoming owner has given £300,000 of chargeable consideration by taking on the mortgage liability, so SDLT is 0% on the first £125,000, 2% on the next £125,000 (£2,500), and 5% on the final £50,000 (£2,500) — £5,000 total. Compare that to buying a £300,000 home outright (also £5,000 here) — the mechanism is the same bands, but applied to the debt, not a purchase price. And in the very common case of adding a partner to a property with a mortgage under £250,000, where their share of the debt is under £125,000, the SDLT is simply zero. You can sense-check the bands using our guide to how stamp duty is calculated — just remember to apply them to the consideration, not the property value.
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When no stamp duty is due
There are several situations where a transfer of equity attracts no SDLT at all:
- Divorce, dissolution or separation (by court order or formal agreement). Transfers of property between spouses or civil partners made as part of a divorce, annulment, dissolution or judicial separation are exempt from SDLT, regardless of the debt involved. This is one of the few clear reliefs, and it’s a significant advantage — a transfer that would cost a cohabiting couple thousands can cost a divorcing married couple nothing. The transfer must be made in pursuance of a court order or formal separation agreement connected to the marriage or civil partnership breakdown. The mortgage side still needs arranging, which is where our guide to a mortgage after divorce helps.
- A genuine gift with no consideration. If you gift a share of a property and there’s no mortgage and no cash changes hands, there’s no chargeable consideration and no SDLT — for example, gifting a mortgage-free property (or share) to a child. See our guide on a gifted deposit for related family-gifting situations.
- Inheritance. Property transferred as part of an inheritance or will doesn’t attract SDLT.
- Consideration below the threshold. Even where there is debt assumed, if that consideration is below the £125,000 nil-rate threshold, no SDLT is payable (though a return may still be needed — see below).
The traps that catch people out
Transfer-of-equity stamp duty has a few nasty surprises worth knowing about before you proceed:
- The additional-property surcharge for existing homeowners. This is the big one. If the person receiving the share is unmarried to the current owner and already owns another residential property (a buy-to-let, a holiday home, or their own separate home), they can be hit with the 5% additional-property surcharge on the whole consideration — not just the portion above a threshold. So a £200,000 consideration that would be £1,500 in standard SDLT becomes £11,500 with the surcharge. This catches out unmarried couples where one partner keeps a former property.
- Separated (but not yet divorced) spouses. The surcharge is normally disregarded for transfers between cohabiting spouses or civil partners, but if a couple has separated, the transfer can lose that protection and be treated as a higher-rate transaction — potentially adding thousands.
- The £40,000 return threshold. Even when no SDLT is payable, an SDLT return is generally required whenever the chargeable consideration is £40,000 or more. Miss it and automatic penalties can apply. Your solicitor normally handles this, but it’s a duty that’s easy to overlook on a “no tax to pay” transfer.
- Second properties. If the transfer is of a second property (like a buy-to-let), the SDLT return threshold effectively drops, and surcharges are more likely to apply.
Because these traps hinge on marital status, existing property ownership and the exact nature of the transfer, this is very much a situation to take proper conveyancing and tax advice on — the difference between getting it right and wrong can be five figures.
Transfer of equity and remortgaging
In practice, a transfer of equity almost always happens alongside a remortgage, and understanding why matters. When someone leaves the ownership (say, in a buyout or separation), they usually need to be removed from the mortgage too — but a lender will only agree to that if the remaining owner(s) can afford the mortgage on their own. That typically means remortgaging into the remaining owners’ names, with the lender reassessing affordability. Sometimes the remortgage also raises extra money — for instance, to fund a cash buyout of the departing owner’s equity — and if cash is paid for the share, that cash adds to the chargeable consideration for SDLT. It’s worth being clear on one distinction: a pure remortgage with no change of ownership is not a transfer of equity and triggers no SDLT — releasing equity through a bigger mortgage while the same people own the property doesn’t create a land transaction. It’s only when ownership changes hands, with debt or cash consideration, that SDLT comes into play. Because the remortgage and the affordability assessment are usually the practical hurdle (more so than the often-modest SDLT), getting matched with a lender comfortable with transfer-of-equity cases is the key step. Understanding your borrowing capacity and likely monthly repayments as a sole owner is often where it starts.
The bottom line
Stamp duty on a transfer of equity is charged on the chargeable consideration — the cash paid plus the share of mortgage debt taken on — and crucially not on the property’s value, which is why it’s often zero or small. Standard bands apply to that consideration: nothing up to £125,000, then 2% and 5%. Divorce and separation transfers by court order are generally exempt entirely, and genuine gifts with no consideration attract no SDLT. But watch the traps: the 5% surcharge can hit an incoming owner who already owns property, separated spouses can lose their exemption, and a return is needed at £40,000+ even with no tax due. Since a transfer of equity nearly always involves a remortgage, sorting the mortgage — and taking proper tax and legal advice — is the practical priority.
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Stamp duty on transfer of equity: FAQs
Do you pay stamp duty on a transfer of equity?
Sometimes, but often not. Stamp duty on a transfer of equity is charged only on the “chargeable consideration” — the cash the incoming owner pays plus the share of the mortgage debt they take on — and not on the property’s value. So if the debt they assume (plus any cash) is below the £125,000 nil-rate threshold, no SDLT is payable. For example, adding a partner to a home with a £200,000 mortgage where they take a 50% share means they assume £100,000 of debt, which is below the threshold, so there’s no SDLT. If the consideration exceeds £125,000, SDLT applies to the excess at standard rates. Divorce and separation transfers by court order are generally exempt entirely, and genuine gifts with no mortgage or cash have no chargeable consideration.
How is stamp duty calculated on a transfer of equity?
It’s calculated on the chargeable consideration — the total of any cash paid for the share plus the share of the outstanding mortgage the incoming owner takes on — using standard residential SDLT bands: 0% up to £125,000, 2% from £125,001 to £250,000, and 5% from £250,001 to £925,000. It is not calculated on the property’s market value or the equity. For example, if a partner takes on liability for a £300,000 mortgage, that’s £300,000 of consideration, and the SDLT is £5,000 (0% on the first £125,000, 2% on the next £125,000, and 5% on the final £50,000). If they take on £150,000 of debt, the SDLT is just £500. Below £125,000 of consideration, there’s nothing to pay.
Is there stamp duty on a transfer of equity in a divorce?
Generally no. Transfers of property between spouses or civil partners made as part of a divorce, annulment, dissolution or judicial separation are exempt from SDLT, regardless of the mortgage debt involved. To qualify, the transfer must be made in pursuance of a court order or a formal separation agreement connected to the breakdown of the marriage or civil partnership. This is a significant advantage: a transfer that would cost a cohabiting (unmarried) couple thousands of pounds in SDLT can cost a divorcing married couple nothing. It’s one of the few clear reliefs in this area. Note, however, that the mortgage itself still needs to be dealt with — usually by remortgaging into the remaining owner’s sole name, subject to them proving they can afford it alone.
Do I pay stamp duty if I add my partner to my mortgage?
It depends on the mortgage size and your circumstances. When you add a partner to the deeds and the mortgage, they take on a share of the mortgage debt, which counts as chargeable consideration for SDLT even if they pay you no cash. If their share of the debt is below £125,000, no SDLT is due. If it’s above, SDLT applies to the excess at standard rates. For example, adding a partner to a £300,000 mortgage where they take 50% means £150,000 of consideration, giving £500 of SDLT. One important warning: if your partner is not married to you and already owns another property, they could face the 5% additional-property surcharge on the whole consideration, which can add thousands — so it’s worth checking before proceeding.
Do you pay stamp duty on a remortgage?
No — a straightforward remortgage does not attract stamp duty. If you’re simply switching your mortgage to a new deal or lender, or even releasing equity through a larger mortgage, while the same people continue to own the property, there’s no change of ownership and therefore no land transaction for SDLT purposes. Stamp duty only enters the picture when ownership actually changes — such as in a transfer of equity where someone is added to or removed from the title and takes on mortgage debt or pays cash for a share. This distinction catches some people out: remortgaging alone is SDLT-free, but combining it with a transfer of equity (a change of owners) can trigger SDLT on the consideration involved in that transfer.
Do I need to tell HMRC about a transfer of equity if no tax is due?
Often yes. An SDLT return is generally required whenever the chargeable consideration is £40,000 or more, even if no stamp duty is actually payable because the amount falls below the £125,000 threshold or an exemption applies. Failing to file a required return can attract automatic penalties. In practice, your conveyancing solicitor normally handles the SDLT return as part of the transfer, filing it with HMRC within 14 days of completion. However, it’s an obligation that’s easy to overlook on a “no tax to pay” transfer, so it’s worth confirming with your solicitor that the return is being dealt with. Where the consideration is genuinely nil — a pure gift with no mortgage and no cash — no return is needed.
- GOV.UK — SDLT: transferring ownership of land or property
- HMRC SDLT Manual — assumption of debt as consideration
- MoneyHelper — free, government-backed money guidance
Important information
nextmove is an introducer, not a lender, mortgage adviser, tax adviser, solicitor or conveyancer. This article is general information only and does not constitute tax, legal or financial advice. SDLT treatment of transfers of equity depends on the precise facts — including marital status, existing property ownership, the debt assumed, any cash paid, and whether a court order applies — and rules change over time; the figures here are illustrative examples, correct to the best of our knowledge as of 2026, and apply to England and Northern Ireland (Scotland uses LBTT and Wales uses LTT). Always take proper conveyancing and tax advice on your specific transfer. We introduce you to FCA-regulated, whole-of-market mortgage brokers who can advise on transfer-of-equity remortgages, and we may receive a fee or commission for doing so.
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