How to gift a property to a child, spouse, civil partner or family member.

Property owner speaking to solicitor by phone with child in the background

Gifting a property to a child, spouse or family member is an effective way of minimising Inheritance Tax (IHT). The legal process can be complicated, however, and you will need to be aware of the broader tax implications.

In this article, we explain what you need to consider when gifting a property.

Transferring equity

A 'transfer of equity' is when an existing owner of a property adds or removes one or more people to the title (ownership) of the property.

You might decide to transfer equity if you:

  • Sell your share in a property
  • Buy out an ex-partner after a separation
  • Buy out a joint owner
  • Adding a new partner or spouse to the deeds of your home
  • Gift a property (or share in a property) to a child, spouse, civil partner or other family member

Gifting a property to a child

One of the most common reasons for transferring equity to a child is when a parent gifts a property, or share in a property, to a son or daughter.

Gifting your property to your children can reduce the value of your estate, thereby reducing or negating the amount of Inheritance Tax (IHT) your children will need to pay.

Deed of Gift

The formal legal document used to gift a property to a is known as a "transfer by way of gift" or 'Deed of Gift'.

Gifting a property and Inheritance Tax (IHT)

If you want to gift your property to your child before you die, you will need to live for at least 7 years from the date of transfer for your children to pay not IHT.

If you die within 7 years of gifting a property, then your children may have to pay some IHT, as follows:

No. years between the date of gift and date of death IHT % payable
less than 3 40%
3 to 4 32%
4 to 5 24%
5 to 6 16%
6 to 7 8%
7 or more 0%


Can a child (under 18) legally own a property?

No. A minor (under 18 years old) cannot legally hold the title of a property in their own name.

However, it is possible for a property to be held in trust. Once the minor turns 18, ownership of the property can be transferred to them and formally registered in their own name.

Your conveyancing solicitor will be able to complete the formalities of forming a trust, which will include setting up a 'trust deed'.

Are there any risks when transferring property ownership to children?

There are potential risks when gifting your property to children.

Once you have legally gifted your property to a trust or your child directly, the property is no longer yours.

Parents often intend to continue living at the property once it has been gifted. Problems can sometimes arise if the unforeseeable happens. If, for example, the child divorces, dies or is unable to keep up any mortgage repayments, the parent would have no claim over the property and could end up with nowhere to live.

Gifting a property to a spouse or civil partner

If a spouse or civil partner wishes to transfer property, land or other assets between them, gifting can be the best and most tax-efficient way to achieve this.

For example, a husband who wholly owns a property might want to protect his spouse's interest in the property. This could be achieved by gifting 50% of the property to the spouse.

If the transfer is between a married couple or civil partners, there would be no Capital Gains Tax (CGT) or Stamp Duty Land Tax (SDLT) payable.

Gifting a property to another family member

The process for gifting property to a family member (e.g. a sibling) is similar to the process of gifting to a child, spouse or civil partner.

Some rules may differ, in particular the rules applying to Capital Gains Tax (CGT). You should speak to a tax specialist about whether the relative you are giving property to is considered a "connected person", and what tax rules apply.

Getting professional tax advice is critical, as you could end up with a CGT bill if your transfer is mishandled.

Read more:

Do I pay Stamp Duty Land Tax (SDLT) on a transfer of equity?

Do I have to pay Capital Gains Tax (CGT) on a transfer of equity?

Will I have to move out of the property?

It depends. The current owner will have to move out of the property when gifting to a child or other family member, unless you:

  • pay rent (at full market rate) to the person you transfer the property to, and
  • contribute to your share of the bills.

If the new owners (e.g. the children) also live at the property, or if you only gift a share in the property (rather than the whole of the property), you can continue to live at the property and will not have to pay rent.

Are there any conditions I must meet before gifting a property?

If you want to gift a property:

  • you will need to be the registered owner of the property at HM Land Registry (HMLR)
  • there should not be a mortgage o the property
  • there cannot be a charge secured against the property

Can a conveyancing solicitor handle the gifting of the property?

Yes. Most people instruct a solicitor who can incorporate the deed of gift into the transfer of equity process. Although you can do it yourself, the process can get complicated. There could be tax implications if you make an error.

Transfer of equity legal fees are inexpensive, so most people prefer to use a solicitor.

Your solicitor will advise on the options for joint-ownership, draw up a deed of gift, set up a trust (if required), complete the HM Land Registry (HMLR) paperwork and handle any Stamp Duty Land Tax (SDLT) administration.

If there is an existing mortgage, the lender will require the transfer of equity to be carried out by a conveyancing solicitor.

What if I want to share the equity?

If you want to share the equity in your home, you will need to decide on the most suitable form of tenancy.

You and the person you are sharing equity with can be either:

Joint tenants

As joint tenants, you will each own the entire property equally and no individual owns a quantifiable share. If one joint tenant dies, the property ownership automatically passes to the other joint tenant(s) - regardless of what is stated in the will.

Tenants in common

Tenants in common can own different % shares in the property. If one person dies, ownership of the deceased person's equity does not automatically go to the other party. This is common for divorced couples sharing a property, and it means you can pass on your share of the property in your will to whomever you wish.

What else do I need to know?

Mortgaged properties

If you have a mortgage or debt secured on the property, you will need the lender's consent before you can gift the property to someone else.

Read more:

Should I tell my lender if transferring equity in my home


It’s also important to think about your financial situation when it comes to potential insolvency. If you give your house away and go bankrupt within 5 years of the transfer, the official receiver may have the power to claim the property back if it is felt that the transaction was deliberately undertaken in order to put the property out of reach of creditors.

Continuing to live in the property after the transfer

You should also consider where you are going to live after you have gifted the property. You may continue to live in your home once you have transferred it, but you will need to consider the tax implications.

Also, if a tenancy agreement or similar arrangement is not in place, you will not retain any legal right to remain present in the property.

Article by Completely Moved authors

The Completely Moved team have years of experience helping home buyers, sellers and owners, answering questions and providing property advice.

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