When two or more people jointly own a property, business or land together, they will often wish to hold it in as tax-efficient a manner as possible. This sometimes means transferring full or part ownership to someone else in order to benefit from economic efficiencies. Transferring beneficial interest in a property requires either a deed of assignment or a deed of novation to be completed once the joint tenancy has been severed and a tenants in common ownership model adopted.
What Is the Difference?
A deed of assignment is used when transferring beneficial interest between existing co-owners of the property, whereas a deed of novation is used to transfer part of the beneficial interest to a new third party with the consent of the other existing co-owner.
Why Does This Difference Exist?
A deed of assignment modifies the existing ownership contract, whereas a deed of novation triggers the creation of an entirely new contractual relationship. A deed of novation cannot be initiated without consent, whereas this is not always necessary for a deed of assignment, depending upon the specific terms of the new agreement.
How to Get a Deed of Assignment
As a deed of assignment is a legally binding document, you will need a lawyer such as Parachute Law to write it for you. They will check all parties’ identification, perform all necessary anti-fraud checks, draft the document, tailoring it to your specific needs and circumstances, and update the title deeds of the property with HM Land Registry.
In Conclusion.
There are a myriad of reasons why someone may wish to alter an existing ownership contract for a property, piece of land or business. By identifying their motivations and intent and discussing this with a lawyer, they will be able to determine the best mechanism for enacting the change, whether this be a deed of assignment to transfer shares between existing owners to benefit from tax efficiencies or a deed of novation to transfer shares to a new third party.
