Gifting your home to your children can feel like a meaningful gesture, but in the UK, it comes with legal, tax, and financial implications. Whether as part of estate planning or simply wanting to pass on assets during your lifetime, understanding the full picture is essential before making a move.
This guide explains what’s involved in gifting property, the key tax considerations, and how to avoid common pitfalls so that you can make a confident, informed decision.
What Gifting a Property Means
Gifting a property means legally transferring full ownership from you to your child without receiving payment. While no money is exchanged, it’s still treated as a formal transaction and can trigger taxes, paperwork, and long-term consequences.
When Is the Right Time?
Property can be gifted at any time, but timing affects tax exposure. The longer you live after the gift, the lower the chance of it being counted as part of your estate for Inheritance Tax (IHT) purposes. Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT) may also apply depending on circumstances.
Legal & Tax Considerations
Gift with Reservation of Benefit
If you gift your home but continue living in it without paying full market rent, HMRC may consider the property as still part of your estate. This is known as a Gift with Reservation of Benefit (GROB), and it can nullify the inheritance tax benefit of the gift.
Inheritance Tax: The 7‑Year Rule
Gifting a property is classified as a Potentially Exempt Transfer (PET). If you survive for 7 years after the gift, no IHT is charged. If you pass away within 7 years, taper relief reduces the tax owed:
Capital Gains Tax (CGT)
If the property is not your main home (such as a buy-to-let), CGT may be due based on its increase in value since you bought it. Even if you’re gifting it for free, HMRC treats the transfer as if it were sold at market value. If it’s your main residence, Private Residence Relief may apply and reduce or eliminate this tax.
Stamp Duty Land Tax (SDLT)
No SDLT is due when gifting a property unless your child takes on a mortgage as part of the transfer. If that’s the case, SDLT applies to the value of the debt being transferred.
Gifting vs Leaving in a Will
Why Some People Gift:
- Reduces the taxable value of your estate if you live more than 7 years
- Allows your children to benefit from the property while you’re still alive
Why Others Wait:
- Beneficiaries inherit at the market value at the time of death, meaning no CGT on historical gains
- You retain control and flexibility during your lifetime
Conclusion: Make the Right Move, the Right Way
Gifting your home is more than just a signature — it’s a legally binding act with long-term consequences. From tax implications to inheritance planning, the process should be handled carefully to protect both your interests and your family’s future.
At Property Swift, we help you complete your property transfer securely, digitally, and with full legal oversight — no confusing paperwork, no in-person meetings, and no unnecessary delays.
If you’re thinking of gifting a property, our online property transfer service takes care of the legal and administrative side, so you can focus on what really matters.
Want to transfer your property the easy way?
Start your secure, fully remote transfer today with Property Swift.
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