Gifting a property to a family member can be a generous and meaningful way to support loved ones or plan for the future. In the UK, however, the process involves more than simply handing over the keys — you need to follow legal procedures, understand the tax implications, and take steps to protect both parties. This 2025 guide explains the process, costs, and key considerations when transferring a house as a gift.
Can You Gift a House in the UK?
- Yes, it’s perfectly legal to give away your property to someone else, whether that’s your child, sibling, or another relative.
- You must formally transfer legal ownership so it’s recorded with the UK property registry.
- If there’s an outstanding mortgage, your lender’s approval will be required before the transfer can proceed.
Common Reasons for Gifting a Property
- Passing on wealth early to avoid future inheritance disputes
- Helping children step onto the property ladder
- Reducing the size of your estate for potential Inheritance Tax benefits
- Estate planning for older homeowners
Tax Implications When Gifting Property
Inheritance Tax (IHT)
- Gifts are classed as Potentially Exempt Transfers
- If you survive 7 years after gifting, no IHT is payable
- If you pass away within 7 years, the gift may be subject to tax on a sliding scale
Capital Gains Tax (CGT)
- Applies if the property is not your main residence (e.g., a second home or rental property)
- Calculated based on the property’s market value at the time of transfer
Stamp Duty Land Tax (SDLT)
- No SDLT is due on a pure gift without any mortgage debt transferred
- SDLT applies if the recipient takes on a mortgage above the threshold
Step-by-Step Process for Gifting a Property
1. Confirm Legal Ownership
- Make sure the property’s ownership details are correct and up to date
2. Seek Professional Advice
- Speak with a solicitor or tax adviser to understand all legal and tax implications
3. Agree on the Transfer Details
- Clarify whether the gift is full or partial ownership, and how it will affect any shared interests
4. Register the Transfer with the Property Registry
- Submit the required documents to update the property records officially
5. Update Wills and Insurance
- Once gifted, the property is no longer part of your estate, so make sure your will reflects this
Risks and Considerations
- Gifting your home but continuing to live in it may trigger tax rules unless rent is paid to the new owner
- The recipient’s circumstances (e.g., divorce, bankruptcy) could affect ownership security
- Once gifted, you have no legal control over the property
FAQs
Q: Can my parents gift me a house tax-free?
Yes, provided it’s their main home and they live for 7 years after the gift.
Q: Can I gift my house but still live in it?
A: Yes, but you must pay full market rent to avoid certain tax charges.
Q: How much does gifting a house cost in the UK?
A: Solicitor fees are typically between £400 – £1200, plus any applicable taxes.
Planning to gift your home to a loved one?
We’ll help you navigate the legal process, avoid costly tax pitfalls, and complete the transfer correctly. Get in touch today for expert advice tailored to your unique situation.
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