Can I Sell My House to My Child for £1?

Yes, you can sell your home to your child for £1, but it’s treated as a gift, not a sale. That means potential tax, mortgage, and inheritance risks. That’s why you should always get legal advice and use a conveyancer to structure it properly.

Soaring house prices over the last 30 years have forced more people than ever to need parental help to get on the property ladder. According to a YouGov survey, around 24% of buyers since 2020 say their family helped with the deposit, including 6% whose parents paid the whole thing.

One way some people try and get around things like inheritance tax is by selling their house to their child for £1. The problem is that this path, known as either a "Zero-consideration sale" or "Gift at undervalue", comes with tax traps, legal risks, and long-term consequences.

In this guide, we focus on the parents’ perspective, covering what it means to pass on wealth early, what you need to watch out for and when a Transfer of Equity or a full sale and purchase is the safer route to take.

Why would someone sell their home for £1?

Parents do it for different reasons. Sometimes it’s to help a child buy sooner, other times it’s about passing property on before inheritance becomes an issue. The idea sounds easy enough, but it’s a subject surrounded by half-truths.

Here are some of the main falsehoods you're likely to come across when discussing the subject with friends and family.

Myth: Selling my home for £1 means my kids avoid tax.

Reality: HMRC doesn’t care about the token price. It still uses market value to decide what’s owed for CGT, or IHT (if you fall short of the seven-year window). If you're selling to your child for £0 or £1 there is usually no SDLT for them to pay, unless there is a mortgage liability being transferred with the property, or you're selling the property to company you're connected to (i.e. selling the property to your son's company for £1 - then his company may pay SDLT on the full market value).

Myth: It’s a family transfer, so you can skip the legal side.

Reality: You can’t. It’s still a property transaction. You’ll need a conveyancer (on both sides, if you're conducting a sale and purchase), full paperwork, and a Land Registry update.

Myth: Living there rent-free keeps things simple.

Reality: It complicates things. HMRC can call it a gift with reservation, which pulls the property back into your taxable estate for inheritance tax calculations when you die. If your child were to fall very ill, the property could be sold by the local authority to pay for their care costs, leaving you homeless. If they died, the property could be passed on to their spouse or children, leaving your living arrangements in their control.

Myth: The mortgage can stay as it is.

Reality: The lender has to agree before any transfer can go ahead.

Myth: It protects the house from care-free assessments.

Reality: Councils can treat it as deliberate deprivation of assets if you later apply for support for an issue you were aware of at the time of the transfer.

So, while a £1 sale can still work as intended when it’s done properly, it’s important to know that it’s not a loophole that’s going to protect you from everything. It’s simply a legal gift that needs proper advice and clear paperwork.

Is selling your house for £1 worth it?

So, now we know WHY some people sell their house to their kids for £1, the next question is whether it’s worth doing. There are genuine upsides, but also some legal and tax traps that can easily outweigh them if you’re not prepared.

The risks

These points don’t mean you shouldn’t go ahead, just that the move needs to be structured properly, with full advice before you commit.

The rewards

As we can see, the benefits are certainly there when it’s done in line with the right financial planning advice. The key is knowing when it’s appropriate, and using a conveyancer who can flag any tax or ownership risks.

What are the two legal routes for selling your house for £1 in the UK?

There are only two real ways to pass your home to your child. Which one you pick depends mostly on whether you still have a mortgage and how you want the ownership to sit when it’s done. Let’s take a look at both.

1Transfer of Equity

A transfer of equity is used when you own the home and want to add your child’s name, and may remove your own later on.

• It’s the route families take when the property still has a mortgage or when the parent wants to keep a share.
• The lender still has to sign off before anything changes; any outstanding mortgage could trigger SDLT.
• Your conveyancer draws up a TR1 transfer form and updates the title with HM Land Registry.
• The process is often quicker and easier than a full sale.

2Sale and Purchase

A sale and purchase is used when the property is moving entirely into your child’s name and you're giving up all hold over it. Here are the important things to be aware of.

• HMRC still sees it as a sale, even though the price is only £1.
• Contracts are signed and exchanged in the same way as any other sale, so it can take longer than a transfer of equity.
• SDLT paperwork must be filed, though no tax is due if no mortgage is attached.
• Your child ends up owning the property completely, which can make things simpler when it comes to inheritance later on.
• You no longer have any legal say over the home.

A good conveyancer will tell you early on which path makes the most sense for your situation, then handle the details so the transfer is watertight from both a legal and tax perspective. However, if you're seeking tax advice, you'll need to speak to a specialist accountant, as well as the solicitor who handles the conveyancing.

Expert Help With Conveyancing, Estate Planning & More

Selling your home to your kids like this can be a great way to get their adult lives off to the best possible start. However, as we’ve covered, it needs to be handled with care and precision. Between tax rules, lender conditions, and legal documents, there’s a lot to get right, and it helps to have an expert in your corner.

We’ve helped thousands of parents secure their child’s future with zero consideration sales, estate planning and more. We’ll walk you through the process and make sure you don't encounter any of the pitfalls that exist on this kind of journey.

So, if you’re ready to take the next step, get in touch for a quote today. We'll help you every step of the way as you make important plans for the future.

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