Conveyancing and transferring property

Transfer to an individual

Homeowners may decide to transfer a property to a family member while they are still alive, to minimise any inheritance tax which would otherwise be due. Such transfers are known as ‘lifetime transfers’, ‘potentially exempt transfers’ and ‘PETs’. In order for this to be effective, the transfer must take place at least 7 years before they die. There are various other reasons for transferring property to an individual as a gift.

To effect a transfer, Form TR1 is required to be filed with the Land Registry. For more information on Form TR1 and help with filling it out, read How to fill out Form TR1.

Transferring property into one name or into joint names

Homeowners will often decide to add the name of their spouse to their property deeds when they get married. The opposite may take place upon divorce or separation. In either case, Form TR1 needs to be used (as with the transfer to an individual). A Declaration of trust may also be required. It is a good idea to seek advice from a lawyer on your particular situation.

Probate

If a property is inherited as part of the estate of the deceased, the regular probate process will cover the transfer of property. Probate involves applying for a grant of probate or a grant of letters of administration by filling in a 'Probate application form' (Form PA1P or Form PA1A). For more information, read Probate.

There are various different aspects to conveyancing, but the main aspects which relate to the transfer of property involve the exchange of contracts, resulting in completion.

Once an offer has been accepted, the seller (or their lawyer) must draw up a contract that includes details about:

• sale price

• property boundaries

• fixtures and fittings

• planning and other legal restrictions

• services (eg drainage) to the property

• completion date

Once both parties have agreed on the contract, they make it legally binding by signing final copies and sending these to each other.

Completion takes place once the money has been transferred from the transferee to the transferor, the relevant legal forms effecting the transfer of property (ie TR1) have been finalised and the keys have been handed over.

Purchases by overseas entities

If land (ie real property) in the UK is bought, sold, or transferred by a company or similar organisation (ie an entity) that’s run (ie governed by the laws of a country) outside of the UK, the entity may have to register on the Register of Overseas Entities. 

What is the Register of Overseas Entities?

The Register of Overseas Entities was introduced on 1 August 2022 by the Economic Crime (Transparency and Enforcement) Act 2022. The Act requires that all overseas entities that intend to buy, sell, or transfer land in the UK must register with and give certain information to Companies House. For example, they must inform Companies House who their ‘registrable beneficial owners’ and their ‘managing officers’ are. The register is intended to increase transparency in UK land ownership.

Beneficial owners are individuals who have significant influence or control over the entity. They can be: 

• other companies

• individuals

• trustees 

• governments or public authorities, or

• other legal entities

The rules for determining whether an owner has significant influence or control differ depending on what type of owner it is. For example, an owner of a company will usually qualify if it:

• holds (directly or indirectly) at least 25% of the shares or voting rights in the company

• can remove or appoint a majority of the board of directors of the company, or

• it otherwise exercises (or has the right to exercise) control over the company

If those running an entity cannot identify all of its beneficial owners, they must inform Companies House of the identity of its managing officers. These are the company’s directors, managers, and company secretaries.

The requirement to register also applies to companies that have bought land in the past, ie on or after 1 January 1999 in England and Wales. A company that sold land or property after 28 February 2022 will also have to register (ie even if it no longer holds the property).

Entities must also update the Register annually with information about any changes to registrable beneficial owners. This must be done within 14 days following the anniversary of the entity’s initial registration. An update must be submitted even if no changes have occurred. 

For more information, read the government’s guidance on the Register.