Gifted Homes And Property Transfers: Legal Considerations And Strategies In The UK

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In the UK, gifting property such as the family home or buy-to-let investments to children and other relatives is a goal for many older homeowners. Transferring property offers a means of providing financial assistance and potentially avoiding inheritance tax. However, there are legal factors to consider around permitted gifting rules, taxes payable, deeds of gift and the gifting process itself. This article explores gifting strategies for UK properties, examining if and how homes can legally be gifted, key steps involved, protection of the donor’s interests, costs and taxes payable, and alternative options to full transfer. With proper knowledge, the merits and risks of property gifting can be evaluated so homeowners can make informed decisions.

Can I Gift My House to My Children?

In short yes, homeowners can legally gift their house or other property assets to family members or others through a deed of gift transfer. To legally gift a property, you must:

  • Use a deed of gift (transfer deed) to document gifting the ownership interest to the recipient. This must be registered.
  • Fully transfer the title deeds over to the new owner – you cannot retain any ownership rights.
  • Understand gifted assets leave your estate so cannot be reclaimed unless the deed states otherwise.
  • Pay stamp duty on the market value if not gifting to a spouse/civil partner. IHT could arise after 7 years.
  • Get consent from any joint owners and your mortgage provider authorising a change of ownership.

Gifting is usually an outright transfer of all legal rights and liabilities. Partial gifts may be open to challenge or tax implications.

Key Steps in the Property Gifting Process

The gifting process involves:

  1. Determining the property and recipient – the home itself or just a share.
  2. Obtaining valuations to establish the current market value for tax purposes.
  3. Engaging a solicitor to draw up the deed of gift and ensure the donor’s interests are protected.
  4. Settling any outstanding mortgages before legally changing ownership.
  5. Signing transfer deeds to register a change of ownership with HM Land Registry.
  6. Paying stamp duty on the property’s value if gifting outside of spouses.
  7. Confirming all above parties approve the transfer of ownership.

Gifting requires careful coordination of legal, financial and tax aspects to execute compliantly.

Options for Protecting Donor’s Interests

To protect interests like having somewhere to reside, donors can:

  • Place a discounted sale price rather than £0 gift value on deeds to lower taxes.
  • Include a deed of trust granting lifetime occupation rights.
  • Used a discounted gift deed to retain a percentage of sale proceeds.
  • Receive a portion of rent if gifting a buy-to-let property.
  • Structure transfer as a Potentially Exempt Transfer to avoid IHT for 7 years.

These options balance gift generosity with retaining some oversight. Outright gifting forfeits all control.

Alternative Routes to Gifting Property

Options aside from outright gifting include:

  • Sale at undervalue – Selling but at a discounted price to a relative. Less tax is payable on the lower sale value.
  • Letting to family – Generating rental income while enabling relatives to reside there affordably.
  • Joint mortgage funding – Family members join the mortgage to jointly own.
  • Deed of Trust – Specifies rights of occupation and sale beneficiaries.
  • Will bequest – Specifying property inheritance so it remains in your estate for now.

These allow more control than gifting while still supporting the family financially.


Can I gift my house to my children?” you may think about. Let us put it this way. Gifting property can be an enormously generous act between relatives but the complex legal and tax aspects mean expert guidance is essential. Taking time to structure transfers optimally while retaining some protections safeguards the situation for donors. Outright gifting suits donors wanting a clean break but alternatives exist to balance control and flexibility. For recipients, understanding responsibilities around upkeep, taxes and mortgages is key. With communication, foresight and advice, property gifting can become a mutually beneficial arrangement for UK families.

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