Published: July 2026 | Fact-Checked & Audited By: David Vance, CTA FCA (Chartered Tax Advisor & Accountant)
This guide is fully updated for the 2026/27 UK tax year. All Stamp Duty Land Tax (SDLT) calculations and property tax rules have been audited against official HMRC guidelines.
Transfer of equity is a legal process where the ownership structure of a property changes, but the property itself is not sold on the open market. This is common during marriages, divorces, gifting properties to children, or transferring properties into limited companies for tax planning. While many believe that no tax is due because no cash changes hands, Stamp Duty Land Tax (SDLT) can still be triggered. In this comprehensive guide, we explain how transfer of equity is valued, outline marital and divorce exemptions, and detail the tax rules for limited company transfers.
How is Value Calculated in a Transfer of Equity?
For SDLT purposes, the value used to calculate tax is not the property’s market value. Instead, tax is charged on the **consideration** given for the transfer. Consideration includes:
- Cash Payments: Any cash paid by the person acquiring the equity share to the person giving it up.
- Mortgage Assumption: The value of the outstanding mortgage debt that the acquiring person takes responsibility for. For example, if a partner is added to a deed and takes on 50% of an outstanding £200,000 mortgage, the consideration is £100,000.
To calculate what standard SDLT would be on your consideration, use our Stamp Duty Calculator. If you are transfering properties as a landlord, check out our Property Limited Company vs Personal Tax Calculator to estimate company tax implications, and review our Property Capital Gains Tax Calculator to see if capital gains tax is due.
Marital and Divorce Exemptions
HMRC offers exemptions for transfers between couples depending on the circumstances of the transfer:
- Divorce or Separation: Transfers of property made in connection with a divorce, dissolution of a civil partnership, or formal separation agreement are **exempt from Stamp Duty**. This exemption applies even if there is mortgage debt or cash payments involved, provided the transfer is made under a court order or formal agreement.
- Marriage and Civil Partnerships: Unlike divorce, transferring a share of a property to a spouse upon marriage is **not automatically exempt**. If the consideration (cash paid plus share of mortgage assumed) exceeds the standard £250,000 threshold, SDLT must be paid.
Transferring Property to a Limited Company
A common tax strategy for landlords is transferring personally owned property portfolios to a limited company.
HMRC applies special rules here under **Section 53 of the Finance Act 2003**. When you transfer property to a company you control, the consideration is treated as the **market value of the property** at the transfer date, regardless of whether any money is paid or mortgages assumed. The company must pay standard SDLT on this market value, plus the 5% additional property surcharge.
References & Official Sources
This guide is formulated in accordance with the following official legislation and guidelines:
- Finance Act 2003 (Section 53 & Schedule 3): Statutory rules governing transactions between connected persons and limited companies.
- HMRC SDLT Manual (Section SDLTM29000): Official guidelines on matrimonial transfers, divorce exemptions, and debt assumptions.
Frequently Asked Questions: Transfer of Equity Stamp Duty
Q: Do you pay Stamp Duty on a property transfer during a divorce?
A: No. Property transfers made under a court order or formal separation agreement during a divorce are completely exempt from Stamp Duty.
Q: Is gifting a property to a child subject to Stamp Duty?
A: No. If a property is gifted with no mortgage outstanding and no cash changes hands, the consideration is £0, and no Stamp Duty is due. However, the transfer may be subject to Capital Gains Tax and Inheritance Tax.