Gifting a property to family: tax, mortgages and the legal steps

What gifting a property involves

You can give away a whole property or a share of it, for example to help a child onto the ladder, to pass on a home during your lifetime or to bring a partner into ownership. Legally it is a transfer of ownership for no payment: the conveyancer prepares the transfer deed, deals with any lender, works out any tax for the person receiving it and registers the change at HM Land Registry.

A gift is simple to carry out but can have tax effects for both people, years later as well as now. This guide explains the main points so you know what to ask; it is not tax advice, and for a large gift you should speak to a tax adviser before you commit. It describes England and Wales; the UK taxes below also apply in Northern Ireland, which has its own land registry and forms.

If there is a mortgage

A property with a mortgage cannot be given away without the lender agreeing, because the loan is secured on it. If the person receiving it is to take over the mortgage, the lender will assess whether they can afford it; if the giver stays responsible, the lender may still refuse. Speak to the lender or a broker first, because nothing can complete without its consent.

Taking over a mortgage also changes the tax position, as the next section explains.

Stamp Duty Land Tax

A gift with no mortgage involved usually has no Stamp Duty Land Tax (SDLT), and no return is needed. HMRC's guidance on transferring ownership explains that taking over some or all of a mortgage counts as paying for the property, so SDLT can be due on that amount, and a return is then needed.

For example, a father gives his house to his son, who takes over the £150,000 mortgage. The son is treated as paying £150,000. If he already owns a flat, the higher rates for additional homes apply: 5% on the first £125,000 and 7% on the next £25,000, so £8,000. In Wales, Land Transaction Tax applies instead. Our stamp duty guide sets out the rates.

Capital Gains Tax for the person giving

For Capital Gains Tax (CGT), a gift is treated as a sale at the property's market value on the day of the gift, even though no money changes hands. If the property has been your only or main home throughout, Private Residence Relief usually means there is no CGT. Gifts between spouses or civil partners who live together have no CGT either.

A second home or buy-to-let is different. For example, if a flat bought for £180,000 is worth £260,000 when given to a daughter, the gain is £80,000 before costs and reliefs. For 2026 to 2027 the rates are 18% and 24%, depending on income, after a tax-free allowance of £3,000, and CGT on UK property must usually be reported and paid within 60 days. Get a valuation at the date of the gift: HMRC can question the figure used.

Inheritance Tax and the seven-year rule

A gift to a person is usually free of Inheritance Tax if the giver lives for seven years afterwards. If the giver dies sooner, the gift counts towards their estate. Where gifts in the seven years before death add up to more than £325,000, the tax on them is reduced by taper relief: it is charged at 32% for gifts made 3 to 4 years before death, falling to 8% at 6 to 7 years, instead of 40%. HMRC's page on gifts has the full table.

Separately, a home left to children or grandchildren on death can raise the tax-free threshold to £500,000 where the estate is worth less than £2 million. A gift made during life is treated differently, so ask a tax adviser how a gift affects this before you make it.

Living in the home after giving it away

If you give your home away but carry on living there, HMRC treats it as a "gift with reservation": it stays in your estate for Inheritance Tax however long you live. To avoid this, you must pay the new owner a market rent and your share of the bills. There is no need to pay rent if you give away only part of the home and the new owners live there with you; HMRC explains this on its page about passing on a home.

Giving a home away can also affect care fees. If a council decides you gave it away to avoid paying for care, it can assess you as if you still owned it, as Age UK explains. There is no set time limit for this.

The transfer itself

The conveyancer checks the title, prepares the transfer deed, usually HM Land Registry's form TR1, stating that it is a gift, and arranges for it to be signed and witnessed. Both the giver and the person receiving the property have their identity checked. Where a share is given, the owners decide whether to hold it as joint tenants or tenants in common, and a declaration of trust can record the shares.

After completion the conveyancer files any tax return and applies to HM Land Registry to register the new owner. Until the registration is complete, keep copies of everything you signed.

Checklist before you give

• Tax advice on Capital Gains Tax and Inheritance Tax, for a valuable gift
• A market valuation dated at the time of the gift
• The lender's consent, if there is a mortgage
• An agreed plan if you will keep living there, such as a rent at market rate
• How the new owners will hold the property, and whether a declaration of trust is needed
• Your will, which may need updating after the gift

Next steps

Get an instant, itemised quote for a gift or transfer, showing the legal fee, VAT and disbursements. If you go ahead, you are introduced to a law firm that confirms its fees in writing before you instruct it, and that deals with you directly from then on. If only a share is changing hands with a mortgage, our transfer of equity guide explains the extra steps.