Are you gifting property?
Our experienced conveyancing solicitors can help with quickly transferring ownership of property from parent to child, spouse or family member, no matter the transaction type.

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Parents Considering Gifting Property To Children

Gifting Property to Children

21/09/2021
(Last Updated: 28/03/2024)
253,380
9 min read
Key Takeaways
  • You can transfer ownership of house to a family member or spouse, but this will attract gift tax on property transfer, such as capital gains tax.
  • To achieve the gift transfer, you can make a standard sale and purchase, a deed of gift, or a transfer of equity, whichever suits your circumstances.
  • If a mortgage on the gifted property exists, you will need a mortgage agreement from the lender.

Gifting property to children, spouses, or civil partners is very common. However, the process can be confusing as there are several routes for transferring property ownership. There are tax implications for gifting a property under the full market value. Read more about this in: Capital Gains Tax on Gifted Property for Married Couples and Capital Gains Tax on Gift of Property to Children.

This article focuses on how to gift property to children and other family members.



Can you gift property to a family member?

Yes, when transferring property ownership from parent to child, spouse or family member, you need to choose the quickest and most affordable route.

There are four ways to gift your property:


Gifting property with an existing mortgage

When transferring property ownership with a mortgage, where the buyers are using the mortgage to pay the sellers, they'll need to get an undervalue mortgage offer.

For example: The property is worth £500,000 on the open market. However, the buyers are getting a mortgage for £250,000, and this is all they are paying (the total consideration). The mortgage lender must be informed of this. The mortgage lender will state within the mortgage offer that they know the property is being sold under market value.

If the mortgage lender doesn't confirm it is an undervalue mortgage offer, then your solicitor will need to reflect the full purchase price in the contract of exchange, and SDLT will be payable on the total cost. Read more about Concessionary Purchases and what you need to do.

Gifting property with a mortgage means that the transaction must be a sale and purchase because the mortgage lender will require standard conveyancing protocol to be followed by the purchasing solicitor.


What is the legal process for gifting property to your family?

We run through the legal process for each of the above routes to transfer house ownership to a family member or spouse.

  • 1
    Sale and Purchase for Gifting a House

Whether the transaction is for full market value or under, if you are gifting property with a mortgage, you'll need to follow the normal sale and purchase process. Here are the key stages when selling property to family:

  • Seller and buyer get independent solicitors
  • Seller completes standard protocol forms such as fittings and contents forms
  • Buyer gets their mortgage offer
  • Buyer orders searches
  • Exchange and completion

The conveyancing process will take the standard time to get to exchange because you are getting a mortgage and ordering conveyancing searches from the council. Crudely estimated at 4 to 8 weeks; however, if it is a leasehold, it will take longer as the seller needs to get the leasehold management pack.

We can handle the entire process, from conveyancing to arranging access for your surveys and ordering searches for you.



  • 2
    Deed of Gift/Transfer By Way of Gift

The parties leaving the title are unrepresented unless they choose to get a solicitor, and the process is as follows:

  • New owners get a solicitor to handle the transfer
  • TR1 is drafted and sent to the Transferor (current owners) and Transferee (new owners)
  • Current owners get their ID1 form verified by a solicitor and obtain independent legal advice regarding the Transfer.
  • Completion takes place

This process for gifting a house is completed much quicker, usually 3 to 4 weeks. The longest part is getting the ID1 verified and getting legal advice on the transfer, especially if the current owner lives overseas. We can get your ID1 form verified, so please contact us if you need help.



  • 3
    Transfer of Equity
Transfer of Equity Process explained by SAM Conveyancing

Where one or more of the original owners will remain on the legal title, the transfer can occur as a transfer of equity. The party leaving the title is often unrepresented.

  • New owners and remaining owner use the same solicitor
  • TR1 is drafted and sent to the current and new owners
  • Leaving owner gets their ID1 form verified by a solicitor
  • Completion takes place

A Transfer of Equity takes a similar time to complete as a deed of gift; however, it can take longer if the property is leasehold or there is a mortgage that requires the lender's consent for adding children's names to house deeds/mortgage.

Get a Transfer of Equity Quote
Average costs from £363 INC VAT


Gift from parents tax liability and risks?*

These are the potential tax consequences and risk considerations for gifting property to children:

  • Insolvency

    The transaction could be voided if you are made bankrupt within five years of gifting a house.
  • Inheritance Tax Payable

    If you die within 7 years of gifting a house, then the gift is taken into account when assessing your tax liability for inheritance tax purposes. In this case your estate would have to pay inheritance tax on the value of the gift, as a percentage of the market value at your time of death.
  • Capital Gains Tax Implications

    Suppose the property isn't your principal place of Residence, and you are gifting the property to a connected person. In that case, you have to pay Capital Gains Tax on the property's market value, not for the gifted amount.
  • Care home fee avoidance.

    If you are gifting your property to avoid care home fees, then this could be viewed by the local authority as a deliberate deprivation of assets.
  • You need the money back.

    A gift is not a loan, and you have no legal right to enforce the repayment of the gifted property. Read more here - you make a loan instead of transferring property ownership from parent to child. How do I avoid capital gains tax on gifted property? *

Do I have to pay capital gains tax on gifted property?

Capital gains tax is payable on the market value of property or percentage of the property being gifted.

In certain circumstances, You can avoid paying capital gains tax charges if you transfer ownership to a spouse or gift the property to a charity. Read more about the exceptions - Capital Gains Tax on Gifted Property.

We can refer you to a tax advisor to review your tax implications at competitive prices.


Need tax advice on your property transaction?

  • Get up-to-date property tax advice on SDLT, CGT, IHT, Personal versus partnership versus company structures
  • Free 15-minute initial consultation with a qualified accountant from our panel of tax advisors
  • Ask your tax questions and get guidance on what you can do next
  • If there is some further accountancy work required, then you'll be quoted for this as a separate piece of work with no obligation to purchase

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Andrew Boast of Sam Conveyancing
Written by:
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh Bailey, Digital Marketing Manager
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Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.


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