Do you pay SDLT when one spouse transfers their share of the home and the other takes over the mortgage?

Introduction

This is a common Stamp Duty Land Tax question where a married couple jointly own their home, but a lender requires the property to be put into one spouse’s sole name as part of refinancing, equity release or later-life borrowing.

Many people assume there is no SDLT because no cash is being paid between spouses. That is not always right. For SDLT purposes, taking over liability for part of an existing mortgage can count as chargeable consideration, even where the transfer is between spouses and even where the property is the family home.

The key issue is usually whether the spouse acquiring the other share is assuming mortgage debt, and if so, how much.

The Question

A married couple jointly own their main residence. The property is worth about £2 million and is subject to an existing joint mortgage of £615,000. One spouse is arranging a new loan in their sole name, and the lender requires the home to be transferred into that spouse’s sole ownership. As part of that process, the acquiring spouse will take over the outgoing spouse’s 50% share in the property and effectively assume full responsibility for the existing mortgage.

The question is: how much SDLT is payable on that transfer?

Nick’s Explanation

Nick’s reasoning was that SDLT can arise even where no money is paid directly to the transferring spouse. The important point is that assumption of debt can itself be consideration for SDLT purposes.

In anonymised form, his explanation was:

“Where one joint owner acquires the other’s share, and debt or other consideration is given, the transaction is a land transaction for SDLT purposes. Even though there is no cash payment, taking on the other spouse’s share of the existing mortgage counts as chargeable consideration.”

He then applied that principle to the figures. Half of the joint mortgage of £615,000 is £307,500. That amount is treated as the chargeable consideration because the acquiring spouse is taking on the other spouse’s share of the mortgage liability.

Using the residential SDLT rates stated in the original advice:

• £125,000 at 0% = £0
• £125,000 at 2% = £2,500
• £57,500 at 5% = £2,875

The total SDLT came to £5,375.

Nick also noted that, on the facts given, the higher rates for additional dwellings did not apply because the transaction related to the couple’s main residence and was not the purchase of an additional property.

The Law

SDLT is charged under Part 4 of the Finance Act 2003.

Section 42 Finance Act 2003 provides that SDLT is charged on land transactions. Section 43 defines a land transaction as an acquisition of a chargeable interest.

Where one co-owner transfers their share in a dwelling to another co-owner, that transfer can be a chargeable land transaction.

The next question is whether there is chargeable consideration. Section 50 Finance Act 2003 and Schedule 4 are important here. For SDLT purposes, chargeable consideration is not limited to cash. It can include the assumption, satisfaction or release of debt. In practical terms, if the acquiring party takes over liability for a mortgage, that assumed debt is usually treated as consideration.

So, where spouses jointly own a property subject to a joint mortgage, and one spouse transfers their share to the other, the acquiring spouse may be treated as giving consideration to the extent they assume the transferring spouse’s share of the mortgage debt.

Spousal transfers are not automatically exempt from SDLT. There is relief for certain transactions connected with divorce, dissolution of civil partnership, separation agreements or court orders, but those special relieving provisions depend on the facts and were not part of the scenario here.

Analysis

Step 1: identify the transaction.

One spouse is acquiring the other spouse’s beneficial and legal interest in the home. That is an acquisition of a chargeable interest in land, so it is capable of being a land transaction under section 43 Finance Act 2003.

Step 2: identify whether any consideration is given.

There is no direct cash payment to the transferring spouse, but that does not end the SDLT analysis. The acquiring spouse is taking over the outgoing spouse’s share of the existing mortgage liability. That assumption of debt is chargeable consideration.

Step 3: calculate the amount of consideration.

The existing mortgage is £615,000 and is in joint names. On the usual analysis, each spouse is treated as responsible for half. The outgoing spouse’s half is therefore £307,500.

That £307,500 is the amount on which SDLT is calculated.

Step 4: apply the relevant residential rates.

Using the rates set out in Nick’s explanation:

• 0% on the first £125,000
• 2% on the next £125,000
• 5% on the remaining £57,500

This gives total SDLT of £5,375.

Step 5: check whether any surcharge or relief changes the result.

On the facts given, the higher rates for additional dwellings do not apply because the property is the main residence and no additional dwelling is being acquired. However, this point always needs checking carefully against the purchaser’s wider property ownership position at the effective date of the transaction.

Step 6: consider the conveyancing point.

Where a conveyancer must give an undertaking to a lender or the lender’s solicitors about SDLT compliance, they will usually want a clear SDLT analysis before completion. That is because the filing and payment obligations sit within a strict statutory timetable.

Outcome

On the facts described, SDLT is payable.

The reason is not that one spouse is buying out the other for cash, but that the acquiring spouse is taking over the transferring spouse’s share of the mortgage. That assumed debt of £307,500 is chargeable consideration for SDLT purposes.

Using the residential rates stated in the advice provided, the SDLT due is £5,375.

Practical Steps

If you are dealing with a similar transfer, it is sensible to work through the following points before completion:

• Confirm exactly who owns the property now and in what shares.
• Confirm the balance of the existing mortgage at the effective date of the transfer.
• Check whether the acquiring spouse is assuming all or part of the outgoing owner’s mortgage liability.
• Check whether the property is the purchaser’s only or main residence.
• Check whether the purchaser owns any other dwellings, as that may affect the higher rates analysis.
• Consider whether any specific statutory relief applies, for example on divorce or separation, if relevant.
• Make sure the conveyancer has the SDLT position confirmed in time to file the SDLT return and arrange payment within the statutory deadline.

If the transaction also involves claims that the property is uninhabitable or not suitable for use as a dwelling, that area now has a relatively high threshold following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. A property will not fall outside normal residential treatment merely because it needs repair, modernisation or substantial work. The facts must be examined carefully.

Conclusion

Where one spouse takes sole ownership of the jointly owned home and also takes over the other spouse’s share of the mortgage, SDLT can be due even if no money changes hands. In this type of case, the SDLT calculation is usually based on the mortgage debt assumed, not the full market value of the property. On the figures discussed here, that produces an SDLT charge of £5,375.

Legal References Used

• Finance Act 2003, section 42
• Finance Act 2003, section 43
• Finance Act 2003, section 50
• Finance Act 2003, Schedule 4
• Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799

This page was last updated on 22 March 2026.

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