My friend, her husband and I bought a buy-to-let property in Newcastle a few years ago on condition that they would pay the deposit, stamp duty land tax (SDLT) and legal costs and I would later buy another property and pay the deposit, SDLT and legal costs like they did previously. Unfortunately, I was not able to fulfil that obligation and I asked for my name to be removed from the mortgage. They have removed my name from the mortgage but my name is on the deeds. How can my name be removed from the deeds, and will there be tax implications?
Arthur Weller replies:
I presume that when you write 'my name be removed from the deeds' you mean that you are giving your part of the property to the other two. This would be deemed to be a sale at today's market value, for capital gains tax purposes. So if the value of the property has risen since it was bought, you will be making a capital gain. There could also be a SDLT issue for the other two, since they are taking responsibility for the part of the mortgage that you were responsible for until now: see HMRC’s Stamp Duty Land Tax manual.