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UK Property Tax Portal
UK Property Tax Q&A
Watch out for stamp duty when transferring property
Question
I currently own a property in my sole name, but am about to transfer 50% ownership to my brother. I currently have an outstanding £200,000 mortgage.
Is there a stamp duty liability when I transfer the mortgage into joint names'? If yes will it be 1% on the effective transfer of £100,000? If I was transferring 50% to my husband (instead of to my brother in the previous example) then would stamp duty still be payable? Arthur says The answer to both questions is YES. Usually there is no stamp duty on gifts, unless the gift is of mortgaged property, in which case stamp duty is charged on the amount of the mortgage as if it were a sale, because the mortgage debt is treated as consideration for the transfer. This applies when the recipient takes over responsibility for the mortgage. But it will not apply if the person or spouse making the transfer undertakes to pay the mortgage.
Case Study
Howard has purchased a property and already incurred a charge of £2,100 in stamp duty.
Two years after the purchase he marries his long-term girlfriend Betty. He decides to move the property into joint names, where they will have equal 50:50 ownership of the property. The outstanding amount on the mortgage at the time of transfer is £200,000. By transferring the mortgage into joint names, Betty will be liable to pay an additional £1,000 in stamp duty. 
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