Keep the real valuation evidence behind a proposed house transfer

A nominal price does not settle the risk

Business debt pressure prompts a suggestion to transfer your share of the home to your spouse for a small amount. Pause for independent legal advice before signing. The description used in a transfer does not make its consequences disappear. The adviser needs the real ownership, value, financial position and proposed consideration to assess the transaction and available options.

Gather genuine valuation information

Imagine a director relying on an old appraisal because it supports a low transfer figure. Provide that appraisal with its date and obtain advice about what current valuation evidence is needed. Do not ask a valuer to reach a predetermined number. Identify the property interest actually being considered, because the whole property's value and the interest being transferred require careful distinction.

Understand why value needs legal review

Sections 120 and 121 of the Bankruptcy Act address certain undervalued transfers and transfers to defeat creditors, subject to their detailed requirements and exceptions. A family relationship does not remove the need for assessment. Ask the lawyer how the provisions may relate to the actual circumstances rather than relying on a simple claim that paying any amount makes a transfer safe.

Source: Bankruptcy Act 1966: sections 120 and 121

Describe what would really be paid

Record the proposed source and form of consideration honestly. In the director's example, a promise of payment later is different from funds actually transferred at completion. Give the adviser the documents and proposed arrangements without disguising a gift as a completed sale. Do not create receipts for money that has not changed hands or backdate an agreement to fit a preferred history.

Include the wider financial facts

Provide current debts, guarantees, mortgage information and any formal demands. The legal assessment should not be based on property value alone while material liabilities are omitted. Your spouse may need separate advice about their own position. Keep proposed steps on hold until the appropriate advisers have explained the consequences and any required approvals or other issues.

Keep a transparent decision record

Retain the valuation evidence, advice and accurate documents explaining any eventual decision. Do not treat a favourable valuation or professional involvement as a guarantee that a transaction cannot be challenged. The objective is an informed and lawful response to debt pressure, with the real facts available, rather than a rushed transfer supported by a price chosen to produce the desired result.