There is no general SDLT exemption for transfers between spouses or civil partners. A transfer with no payment and no mortgage involved is outside the tax because there is no chargeable consideration, but if the spouse receiving a share takes on part of the mortgage, that debt is treated as the price. Transfers made under a court order or an agreement in connection with divorce, dissolution or judicial separation are exempt under Schedule 3 to the Finance Act 2003, even when a mortgage or cash changes hands.

Is a transfer between spouses free of SDLT?

Only if nothing is given for it. Paragraph 1 of Schedule 3 to the Finance Act 2003 exempts a transaction where there is no chargeable consideration, and HMRC’s manual at SDLTM00530 confirms that gifts are not chargeable. This exemption is about the absence of payment, not about the relationship between the parties, so it applies equally to gifts to children, friends or unmarried partners.

GOV.UK lists what counts as chargeable consideration: cash, goods, works or services, release from a debt, and transfer of a debt, including the value of any outstanding mortgage. Spouses are often surprised that SDLT treats them differently from Capital Gains Tax, where you normally pay nothing on assets you give or sell to a spouse or civil partner, unless you were separated for the whole tax year. See spouse transfers and capital gains for that side.

How does the mortgage debt trap work?

Paragraph 8 of Schedule 4 treats the assumption of existing debt by the buyer as chargeable consideration. Paragraph 8(1A) goes further: where a debt is secured on the property before and after the transfer, and any party’s rights or liabilities in relation to that debt change, the buyer is treated as assuming it. HMRC explains at SDLTM04040 that this covers a new personal covenant, the release of the transferor, or an agreement to indemnify the transferor.

Paragraph 8(1B) then limits the amount to the share acquired. Each owner is treated as owing a proportion of the debt equal to their share of the property, and joint tenants are treated as holding equal shares. HMRC’s first example at SDLTM04040a is a sole owner transferring into joint names in equal shares: the new joint owner is treated as assuming 50% of the debt, even though they are probably liable for all of it.

Illustration only. A husband owns the family home in his sole name with a £400,000 mortgage. He transfers it into joint names with his wife, and the lender adds her as a joint borrower. She is treated as paying £200,000. At the 2026 to 2027 standard residential rates that is £0 on the first £125,000 and 2% on the remaining £75,000, so £1,500. Because the consideration is £40,000 or more, a return must be filed within 14 days even though the couple may feel nothing was sold.

Paragraph 8(2) caps the consideration at the market value of what is transferred, which helps where a property is in negative equity.

Do the higher rates apply between spouses?

No, in the usual case. Paragraph 9A of Schedule 4ZA says a transaction is not a higher rates transaction where there is one buyer and one seller who, on the effective date, are married or civil partners and living together. Where a spouse already owns part and is technically also a buyer, paragraph 9A(2) and (3) ignore that so the exclusion still works. GOV.UK puts it simply: the higher rates do not apply to a transfer to your spouse as long as no one else is involved.

Living together takes its Income Tax meaning under section 1011 of the Income Tax Act 2007, as paragraph 9(3) of Schedule 4ZA provides. The separate rule in paragraph 9, which treats a married buyer as buying jointly with their spouse when testing for the higher rates, also applies only while they live together.

When is a transfer on divorce exempt?

Paragraph 3 of Schedule 3 exempts a transaction between one party to a marriage and the other if it is effected:

  1. under a court order made on granting a divorce, annulment or judicial separation
  2. under a court order made in connection with the divorce, annulment or judicial separation at any time after it was granted
  3. under certain financial orders, including orders under sections 22A, 23A or 24A of the Matrimonial Causes Act 1973
  4. at any time under an agreement made in contemplation of, or otherwise in connection with, the divorce, annulment, judicial separation or a separation order

Paragraph 3A gives the same exemption for the dissolution of a civil partnership. Because the transaction itself is exempt, it does not matter that one spouse takes over the mortgage or pays the other a lump sum. GOV.UK confirms no return is needed.

The exemption only covers transfers between the two spouses or civil partners. HMRC’s manual at SDLTM00550 states that it is not available if someone else is involved, so a transfer to one spouse and a new partner jointly, or to a company owned by one spouse, needs separate analysis.

What about separated couples and unmarried partners?

A couple who separate informally, with no plan to divorce or to seek a judicial separation or separation order, cannot rely on paragraph 3(d), because the agreement must be connected with one of those outcomes. Once divorce is contemplated, an agreement made then qualifies even if the order comes later.

Unmarried couples get no divorce exemption at all. When cohabiting partners split and one takes over the other’s share and the mortgage, the debt assumed is chargeable consideration, and if the person taking over owns another residential property the higher rates may apply. The same mechanics apply when cohabitees first buy into each other’s homes, covered in SDLT on gifts of property with a mortgage.

How does divorce affect the higher rates on your next home?

Two rules help. First, once spouses are no longer living together, the other spouse’s property is no longer attributed to the buyer. GOV.UK describes this as being permanently separated. Second, paragraph 9B of Schedule 4ZA, in force from 22 November 2017, ignores an interest in a former home that is the subject of a property adjustment order for the benefit of the other spouse, where that home is the other spouse’s main residence and not the buyer’s. HMRC’s manual at SDLTM09797 confirms that a consent order covering the same ground qualifies.

If a buyer does pay the higher rates because they still own part of the former main home, they can claim a refund if it is sold within three years of buying the new home. The claim must be made within 12 months of the later of the sale and the filing date of the return for the new home.

What mistakes do couples make?

  • Assuming marriage alone makes a transfer exempt when a mortgage is being shared.
  • Not filing a return for a transfer where the debt assumed is £40,000 or more.
  • Relying on the divorce exemption for a transfer that also involves a third party.
  • Paying the higher rates on a new home without checking paragraph 9B or the refund rule.

For the Capital Gains Tax side of a split see capital gains on separation and divorce, and for the rate tables see Stamp Duty Land Tax explained.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.