Can I Gift a House to My Child?
You have raised them, loved them, fed them roughly 12 thousand times, and now you are wondering… can I gift them my house too?
The short answer is yes. The slightly longer answer is yes, but with paperwork, legal advice, and a firm understanding of how inheritance tax and capital gains tax work in the UK. Because as lovely as it sounds to hand your child the keys to the family home, HMRC has a few thoughts on the matter.
Why Would a Parent Gift a House to a Child?
There are lots of reasons you might consider it:
- Planning ahead for inheritance
- Helping your child get on the property ladder
- Protecting the home from care cost assessments
- Just being an incredibly generous mum
The Legal Bit: Yes, You Can
In the UK, you can legally gift a property to your child while you are still alive. This is known as a potentially exempt transfer (PET) under inheritance tax rules.
If you survive for seven years after making the gift, the property is no longer counted as part of your estate. If you do not survive those seven years, inheritance tax may apply depending on the total value of your estate.
What Is the Seven Year Rule?
The seven year rule means that if you gift the house and live for seven more years, it becomes exempt from inheritance tax. If you pass away within seven years, there may be a sliding scale of tax to pay depending on how many years have passed since the gift.
So yes – timing matters.
But What If I Still Want to Live in the House?
Ah. Here is where it gets a bit sticky. If you gift your house to your child but continue to live in it without paying full market rent, it is called a gift with reservation of benefit.
This means HMRC will still consider the house part of your estate when calculating inheritance tax. Essentially, you have gifted it in name but not in practice.
If you do pay full rent and treat it like a true transfer, you can potentially avoid this issue.
What About Capital Gains Tax?
If the house is not your main residence – for example, it is a second home or buy to let – then capital gains tax could be payable when you gift it. The transfer is treated as a sale at market value, even if no money changes hands.
Do I Need a Solicitor?
Yes, please do not try to hand over the house via text message and a bottle of prosecco. You will need a solicitor to handle the transfer of ownership and update the Land Registry.
They can also help with declarations of trust, legal protections, and navigating the tax implications. It is worth every penny for peace of mind.
Is This a Good Idea?
That depends. Gifting a house is a major decision with big financial consequences. It can be a beautiful way to support your child or a tactical part of estate planning, but it should never be rushed.
Always get independent financial and legal advice before making any big moves.
Let Me Say This as a Mum
Your home holds memories, mess, laughter, and love. Gifting it is not just about tax – it is about trust, legacy, and showing up for your child in a big, bold way.
So if you are asking whether you can gift it, maybe the real question is – how can you do it wisely?
FAQs
Can a parent gift a house to a child in the UK?
Yes. UK law allows parents to gift property to their children. However, it may be subject to inheritance tax or capital gains tax depending on the circumstances.
What is the seven year rule for gifting property?
If the parent survives for seven years after gifting the house, it is exempt from inheritance tax. If not, tax may apply depending on the estate value and time elapsed.
Can I still live in the house after gifting it?
Only if you pay full market rent. Otherwise, it is classed as a gift with reservation of benefit and will still count toward your estate for inheritance tax.
Do I need a solicitor to gift a house?
Yes. A solicitor should handle the legal transfer, Land Registry update, and any associated tax or trust paperwork.
Share This with a Mum Who Needs to Know
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