The short answer
Dividing up a home during a divorce or the dissolution of a civil partnership is one of the few situations where Stamp Duty Land Tax (SDLT) genuinely gets out of your way. If a property moves between the two of you under a court order or a formal separation agreement, no tax is due on that transfer — full stop, regardless of the home's value or how much mortgage debt gets taken on. The part that catches people out isn't that transfer itself. It's the purchase that usually follows it: the new home one of you buys once you've moved on. If you're still, even briefly, an owner of the old property when that new purchase completes, HMRC can tax it as a second home.
Not sure what the second-home surcharge actually is?
This guide assumes you already know roughly how the higher rates for additional dwellings work. If you want the full rates, worked examples and how the 5% surcharge stacks on top of standard stamp duty, our complete guide to second homes covers it in detail.
Read Stamp Duty for Second Homes & Buy-to-Let →The exemption: why most divorce transfers cost nothing
The law carves out transactions "in connection with" the end of a marriage or civil partnership and removes them from SDLT entirely. Specifically, a transfer between the two of you is exempt if it's made:
- Under a court order made when granting your divorce, the annulment of your marriage, or a judicial separation
- Under a financial or property adjustment order made under the Matrimonial Causes Act 1973 (or the equivalent Scottish provisions), including orders made after the initial divorce order
- Under a written agreement you both made in connection with, or in anticipation of, the marriage or civil partnership ending — commonly a separation agreement, even if it's never formalised into a consent order
Crucially, the exemption doesn't just cover a straightforward gift of a share. It also covers a transfer where the person receiving the property takes on an existing mortgage, and one where a cash sum changes hands to equalise the split — the kind of "I'll take the house, you keep the pension" arrangement that's common in a financial settlement. None of that triggers SDLT, and there's no SDLT return to file or anything to notify HMRC about.
There's one hard limit worth knowing: the exemption only covers transactions between the two of you. If a third party has an interest in the property — a new partner being added to the title at the same time, for example — that part of the transaction falls outside the exemption and is assessed normally.
Buying out your ex-partner's share of the home you live in
If you're staying in the family home and your ex-partner is transferring their share to you, that's exactly the kind of transaction the exemption is built for — provided it's done under a court order or a written separation agreement. It doesn't matter that you're taking on their half of the mortgage or paying them out for their equity; none of that counts as a chargeable transaction between spouses or civil partners ending a marriage.
The position is different if you were never married or in a civil partnership. Cohabiting couples don't get this exemption at all, so buying out a partner's share is assessed under the ordinary rules: SDLT can be due on any cash payment plus the share of the mortgage debt you're taking on, once that totals more than the nil-rate threshold (currently £125,000 for most buyers, or £300,000 under first-time buyer relief). There's a separate relief that can still help, though — if the home has been your only or main residence for the whole of the past three years, and you already hold at least 25% of it as a joint tenant or tenant in common, HMRC treats you as simply increasing your existing stake rather than buying an additional dwelling, so the second-home surcharge doesn't apply to that purchase either way.
The surcharge trap: when a "simple" split actually costs 5% extra
The higher rates for additional dwellings add a flat 5 percentage points on top of standard SDLT whenever a buyer, at the end of the day they complete, owns more than one residential property and isn't simply replacing their only or main home. That second condition — actually replacing your main residence — is where divorce and separation cases go wrong.
To count as replacing your main residence rather than buying an additional one, you generally need to have disposed of your interest in your previous main home by the time you complete on the new one (or, failing that, within the following three years, with a refund claim to follow — more on that below). "Disposed of" means your legal or beneficial ownership has actually ended, typically through a registered transfer of equity, a sale, or the property moving entirely into your ex-partner's name. Simply moving out doesn't count. Being separated doesn't count. Even having a court order that says the house "will" transfer to your ex doesn't count until that transfer has actually completed.
So the trap looks like this: your divorce settlement says the family home goes to your ex-partner, and under the exemption above, that transfer itself will cost nothing. But if you buy your own new home before that transfer of equity has gone through — perhaps because conveyancing is taking longer than expected, or your mortgage offer on the new place is about to expire and you don't want to lose it — you're still an owner of the old home on the day your new purchase completes. HMRC will usually treat that new purchase as an additional dwelling and charge the 5% surcharge on top, even though you have no intention of keeping two properties.
Disposing of your share first
Your transfer of equity (or sale) completes on or before you complete on your new home.
- You're no longer an owner of the old home when the new purchase completes
- The new purchase is treated as replacing your main residence
- No 5% surcharge, and nothing to claim back later
Buying first, sorting the old home out later
You complete on your new home while you're still a legal or beneficial owner of the old one.
- The old home still counts as yours on completion day
- The new purchase is treated as an additional dwelling
- The 5% surcharge is due upfront, reclaimable only if you dispose of the old home within 3 years
What actually counts as still "owning" the old home
It's worth being precise here, because a lot of the anxiety around this trap comes from conflating two different things. What determines the surcharge is legal or beneficial ownership of the property — essentially, whose name is on the title at the Land Registry, and who still has a beneficial stake in it even if the title hasn't caught up yet. Simply being named on the mortgage, by itself, isn't the legal test.
In practice, though, the two rarely come apart. Mortgage lenders generally won't release someone from a joint mortgage unless a transfer of equity removing them from the title happens at the same time, since the loan and the legal ownership are usually tied together by the lender's own requirements. So if your name hasn't come off the mortgage yet, there's a strong chance it hasn't come off the title either — and if it hasn't, you're still an owner for SDLT purposes, regardless of how the divorce paperwork reads. The only way to know for certain is to check the actual Land Registry position with your solicitor, rather than assuming the mortgage and the title move in step.
Can you get the surcharge back later?
Yes, if you end up paying it unnecessarily. If your new purchase was charged the 5% surcharge because you hadn't yet disposed of your interest in the old home, and you go on to sell it, or complete the transfer of equity to your ex-partner, within 3 years of buying the new home, you can claim a refund from HMRC. This is exactly the same refund mechanism used by anyone who buys before selling in an ordinary house move — our guide to claiming back overpaid stamp duty walks through the process step by step.
The claim has to reach HMRC by whichever is later: 12 months after the date you disposed of your interest in the old home, or 12 months after the SDLT filing date for your new purchase. Miss that window and the refund is gone, so if you know a transfer of equity is still outstanding when you buy, it's worth putting a reminder in the diary rather than waiting to think about it later.
Already paid the surcharge and sold or transferred the old home since?
The claim process and the deadline rules are identical to a standard "bought before selling" refund — you don't need anything divorce-specific to file it.
Read How to Claim Back Overpaid Stamp Duty →When it's worth paying for advice
Most straightforward cases — one of you keeps the house under a consent order, the other eventually buys somewhere new once the transfer has gone through — don't need specialist tax advice; a family solicitor handling the conveyancing will usually sequence things correctly without being asked. It's worth getting specific advice from a solicitor or a tax adviser when: you're under pressure to buy a new home quickly, before the transfer of equity on the old one is likely to complete; the arrangement is informal rather than covered by a court order or written agreement; you were cohabiting rather than married or in a civil partnership; or a third party (a new partner, a parent helping with a deposit) is going to end up on the title of either property. In any of those situations, a relatively small amount spent getting the timing and paperwork right can save a surcharge worth thousands of pounds.
Official source
GOV.UK and HMRC's Stamp Duty Land Tax Manual are the source for the exemption rules, the higher-rates replacement test, and the refund deadlines in this article. Rules can change, so always check the current guidance or speak to a solicitor before relying on a specific figure or date for your own situation.
Frequently asked questions
Do we have to pay stamp duty when transferring our home as part of a divorce?
Usually not. Transferring an interest in a property between spouses or civil partners under a court order — such as a consent order made as part of your divorce, or a financial or property adjustment order — or under a written agreement made in connection with the marriage or civil partnership ending, is exempt from Stamp Duty Land Tax entirely. That's true whatever the property is worth, and even if the person receiving it takes on an existing mortgage or pays the other a cash sum to equalise things. There's no SDLT return to file and nothing to notify HMRC about.
Does buying out my ex-partner's share of our home count as a new purchase for stamp duty?
If the transfer happens under a court order or a written separation agreement connected with your divorce, it's covered by the same exemption and no SDLT is due, regardless of any mortgage debt you take on. If you were never married or in a civil partnership, the exemption doesn't apply — though a separate relief can still protect you if the home has been your main residence for the past three years and you already own at least 25% of it, in which case HMRC treats you as increasing your existing interest rather than buying an additional dwelling.
I've moved out and my ex still lives in our old home — will I pay the extra 5% if I buy somewhere new?
You might, and this is the trap that catches people out. The 5% higher-rate surcharge applies unless your new home is replacing a main residence you've actually disposed of. If you're still a legal or beneficial owner of the old home on the day you complete your new purchase — because the transfer of equity or your mortgage release hasn't gone through yet, say — HMRC will usually treat your new purchase as an additional property and charge the surcharge on top, even though it doesn't feel like you're buying a second home.
Does it matter if I'm still named on the old mortgage rather than still owning a share of the house?
What determines the surcharge is legal or beneficial ownership of the property, not who's named on the mortgage. In practice the two are hard to separate, because most lenders won't release you from a mortgage until a transfer of equity has formally taken your name off the title too — so if your name is still on the mortgage, there's a good chance it's still on the title as well. Check the Land Registry position directly with your solicitor rather than assuming either way.
Can I get the 5% surcharge back later if I do eventually give up my share of the old home?
Potentially, yes. If your new purchase was charged the surcharge because you hadn't yet disposed of your interest in your previous main residence, and you go on to sell or transfer away that interest within 3 years of buying the new home, you can apply to HMRC for a refund using the same process as any other replacement-of-main-residence refund claim. The claim must reach HMRC within 12 months of that later sale or transfer, or 12 months after the SDLT filing date for the new purchase, whichever is later.
Does the stamp duty exemption apply if we were never married or in a civil partnership?
No. The divorce and separation exemption covers only spouses and civil partners — it doesn't extend to unmarried couples splitting up, however long you lived together. Any transfer of a share between you is assessed under the normal rules, meaning SDLT can be due on any cash payment and on the share of any outstanding mortgage the recipient takes on, once that adds up to more than the nil-rate threshold.
This guide is for general information and doesn't constitute financial or legal advice. Stamp Duty Land Tax rules, exemptions and deadlines are set by HMRC and can change, and every divorce or separation settlement has its own circumstances; always confirm your specific situation directly on GOV.UK or with a solicitor or conveyancer before relying on anything here.