Sole ownership is a type of property ownership in which one person owns the property outright. The sole owner has complete control over the property and is responsible for all associated costs and liabilities. They also have the freedom to make decisions about the property without having to consult with anyone else.
What are the reasons for sole ownership?
Sole ownership can be a good option for people who value simplicity, privacy, and flexibility. Some of the most commons reasons for sole ownership are:
Divorce –
If you are getting a divorce and you have decided to transfer your house into sole ownership, there are things that you should consider carefully in advance. If you co-own the house with your partner, an agreement must be reached in advance and this agreement has to be legally recognised. Alternatively, you can sell the house and divide the profits. If you are not interested in this solution and you want to achieve sole ownership, then you have to take legal action. Even if your partner moves out and stops contributing to mortgage payments, their ownership rights do not simply vanish. They might appear after years and claim ownership, and although a solicitor will fight for your best interests, chances are that you will lose some money in the process.
Family –
Many people have multiple family members’ names on the property deed, which can cause conflict issues down the line. By transferring a house to sole ownership, a person has complete control over the property, including the right to make decisions about repairs, renovations, and selling the property. It also simplifies the financial situation by eliminating the need to deal with co-ownership issues, such as mortgage payments and property taxes.
Tax / Gifting –
Another reason why some people may consider transferring property to sole ownership is to reduce their inheritance tax liability. Inheritance tax in the UK is 40%. This means that if you would like to pass on your property to someone after your death (such as via a will), the property will form part of your estate and will incur inheritance tax. By transferring the property to someone as a gift, the property will not form part of your estate and will not be liable for inheritance tax if you (the transferor) is alive for 7 years after the date of the transfer. As everyone’s individual situations can be different, it is important to seek tax advice to check if a transfer to sole ownership will improve your tax-efficiency.
What is the process of sole ownership?
To transfer a joint ownership property to sole ownership, it is essential for all parties to sign the transfer deed and register it with the Land Registry. People who are interested in becoming the sole owner of the property can buy out the share of their ex-spouse or siblings, or reach a different type of agreement. A transfer deed is essential for the process to move forward. If the property is mortgaged, then this will either need to be repaid in full, or the lender will need to give their consent.
Is sole ownership right for you?
Whether or not sole ownership is right for you depends on your individual circumstances and goals. If you are looking for a simple, private, and flexible way to own property, then sole ownership may be a good option for you. However, it is important to weigh the pros and cons carefully before making a decision.
Here are some additional things to consider when deciding whether or not sole ownership is right for you:
Your financial situation: Sole ownership can be risky if you have a lot of debt or if you are not financially stable.
Your risk tolerance: Sole owners are personally liable for all debts and liabilities associated with their business. If you are not comfortable with this level of risk, then sole ownership may not be a good option for you.
Your future plans: If you think you may want to bring in partners or investors in the future, then sole ownership may not be the best choice.
If you are considering sole ownership, it is important to speak with a solicitor to discuss your specific situation and to get professional advice. Our award-winning property team are available on 020 3588 3500, or you can leave a message by pressing the ‘Enquire’ button on the top right side of this page / using our chat box on the bottom right side of this page.
