Correct SDLT Treatment on Remortgage & Property Share Transfer
April 7, 2025
When it comes to Stamp Duty Land Tax (SDLT), transactions involving gifts, transfers of equity, and mortgage liabilities can become complex fast. One client recently turned to Compass for clarity during a remortgage and ownership restructuring process.
The Client’s Situation
The client was remortgaging their property and adding their partner to both the mortgage and the title. The arrangement involved:
- 💝 A 99% gifted share of the property to the partner
- 🏦 A 50% assumption of the mortgage liability by the partner
Uncertain whether SDLT would be due on the gifted share or the mortgage debt, the client needed clear, compliant guidance to avoid any costly mistakes.
How Compass Delivered Clarity
Compass’s tax team reviewed the situation in line with SDLT legislation and supporting case law. Our key finding:
👉 SDLT liability arises not from the gifted share, but from the value of the debt assumed in the transaction.
This meant SDLT was only due on the 50% mortgage liability transferred to the partner—not the entire 99% equity gift.
The Outcome
✅ The client’s SDLT was accurately calculated based solely on the assumed debt
✅ They avoided overpaying SDLT due to common misunderstandings
✅ They received a fully compliant certificate to support their position
Why It Matters
This case is a clear example of how SDLT complexities—especially around part-gift, part-consideration transactions—can trip up even experienced professionals. With Compass, the client navigated the process with confidence, paying only what was legally required.