How to Transfer Ownership of Property to a Family Member

Thinking about transferring ownership of property to a family member? You can gift the whole property, transfer a share or use a trust, but even when no money changes hands, there can still be tax to think about.

A gift can trigger CGT based on market value, SDLT may apply if the recipient takes on mortgage debt, and IHT can become relevant if you continue to benefit from the property after giving it away.

This guide explains the main tax rules in plain English, with practical examples to help you understand what to consider before transferring ownership of property to a family member in England and Northern Ireland.

There is more than one way to pass a property to a family member. The right route depends on whether you want to give it away now, keep a share yourself, use a trust, or let the property pass after your death.

The four best options are:

• gift the whole property outright
• transfer a share of the property while remaining an owner
• place the property into a trust or
• leave the property to them in your will

The first three happen during your lifetime and can create immediate CGT, IHT or SDLT consequences. Leaving the property in your will works differently: ownership passes on death and the property is considered as part of your estate.

The tax result can therefore be very different depending on how and when you transfer the property. A straightforward gift may look simple on paper, but the CGT, IHT and SDLT position should ideally be considered before the ownership is changed.

Can You Gift a House to Your Child?

Yes. You can generally gift a property to an adult child and transfer the legal ownership into their name.

But once the gift is complete, they become the owner. That means they may be able to sell, remortgage or otherwise deal with the property. Their ownership could also become relevant if they later divorce, face financial difficulties or die.

If you stay on the title as a joint owner, the way the property is owned matters. A co-owner can ask the court to intervene, including seeking a sale, although the court decides what is appropriate.

What Happens If the Family Member Is Under 18?

A child under 18 cannot hold the legal title to land in England and Wales. The property would usually need to be held in trust for them.

With a bare trust, the child is beneficially entitled to the property and income. A discretionary trust gives the trustees more control over how and when the assets are used.

Many trusts also need to be registered with HMRC's Trust Registration Service, although exemptions can apply.

There is also a tax rule for parents. If income from assets given by a parent to an unmarried child under 18 exceeds £100 a year, that income is generally taxed on the parent.

Which Forms Transfer Ownership at HM Land Registry?

For a registered property in England and Wales, form TR1 is normally used to transfer the whole title, while form AP1 is used to update the Land Registry.

Form TP1 is different. It is used when only part of the land itself is being transferred, such as part of a garden, not simply because you are transferring a percentage share.

If there is a mortgage, the lender will normally need to be involved and may need to approve the change.

You should also decide whether the property will be held as joint tenants or tenants in common. Tenants in common are usually more suitable where the owners want clearly defined or unequal shares.

The legal transfer can complete before HM Land Registry updates the title, and registration can take several months.

Potentially, yes. Giving a property away does not automatically avoid Capital Gains Tax just because no money changes hands.

If you gift a property to a child, sibling, parent or another connected family member, HMRC will generally treat the transfer as taking place at market value. In other words, CGT is worked out using what the property is worth at the time of the gift, even if you receive nothing for it.

Transfers between spouses and civil partners who live together are different. These are normally made on a no gain, no loss basis, so there is usually no immediate CGT charge.

What If It Is Your Main Home?

If the property has been your main home throughout your ownership and qualifies fully for Private Residence Relief (PRR), there may be no CGT to pay.

If you only lived there for part of the time, the relief is normally restricted to the qualifying period. The final nine months of ownership can also qualify where the property has been your main residence at some point.

A normal buy-to-let will not usually qualify for PRR unless you genuinely lived in it as your main home for part of the ownership period.

For 2026/27, taxable gains for individuals are generally charged at 18% or 24%, depending on your income and the size of the gain. The annual CGT exempt amount is £3,000.

If CGT is due on a gift of UK residential property, it will generally need to be reported and paid within 60 days of completion.

Can You Claim Hold-Over Relief when Transferring Ownership?

Sometimes, but the CGT hold-over relief is quite limited for residential property.

An ordinary gift of a buy-to-let to your child will not normally qualify for Business Asset Gift Relief because standard property letting is generally not treated as a trade.

Hold-over relief may, however, be available for certain transfers into trust where the transfer is immediately chargeable to Inheritance Tax.

The special Furnished Holiday Lettings tax regime ended on 6 April 2025, although some transitional rules can still apply.

Worked Example: Gifting a Buy-to-Let to Your Daughter

Graham bought a buy-to-let for £180,000 and gives it to his daughter in 2026/27 when it is worth £430,000.

Assume he is a higher-rate taxpayer, has his full £3,000 annual exemption available and has no other deductible costs or losses.

If Graham dies five to six years after making the gift, and two £3,000 annual exemptions are available:

• £430,000 − £6,000 = £424,000 gift
• £424,000 − £325,000 nil-rate band = £99,000
• £99,000 × 16% = £15,840 IHT on the gift

But this is not necessarily the full IHT cost. The failed gift also uses Graham’s £325,000 nil-rate band, which can leave more of his remaining estate exposed to IHT.

If you give a property outright to your child or another family member, it will usually count as a potentially exempt transfer (PET). In most cases, there is no Inheritance Tax to pay when you make the gift.

If you survive for seven years, the gift will generally fall outside the IHT calculation. If you die within seven years, the gift is taken into account before the tax on the rest of your estate is worked out.

The standard nil-rate band is £325,000. There is also an additional residence nil-rate band of up to £175,000 where a qualifying home passes to direct descendants. Both are currently fixed until 5 April 2031.

If tax becomes due on a gift because you die within seven years, taper relief can reduce the amount:

One important point: taper relief only reduces the tax on the gift itself. If the gift uses up your £325,000 nil-rate band, there may be no tax on the gift, but less of that allowance will be left for the rest of your estate.

A few other rules are worth knowing:

• Annual exemption: You can generally give away £3,000 each tax year without it counting towards the seven-year calculation. One unused year's allowance can be carried forward.
• Spouse or civil partner: Gifts are generally exempt from IHT, although different rules can apply in some cross-border cases.
• Trusts: Putting property into a discretionary trust can trigger an immediate IHT charge, generally at 20% on the value above your available nil-rate band.

Giving away your home can also affect the residence nil-rate band. However, HMRC's downsizing rules may preserve some or all of the relief where you have sold or given away your home and leave other assets to your direct descendants.

The main thing to remember is that the seven-year rule can make a big difference, but gifting property can also use up allowances that would otherwise have been available against the rest of your estate.

Yes, but there is an important catch.

If you give your home to your children but carry on living there rent-free, HMRC will usually still treat the property as part of your estate for Inheritance Tax. This is known as a gift with reservation of benefit. In other words, giving the house away on paper is not enough if you are still enjoying it as before.

One way to avoid this is to pay the new owner a genuine market rent for living there. That rent will generally be taxable income for the person receiving it.

There is also a specific exception where you give away a share of the property and continue living there with the person who receives it. This can work where you both genuinely share the home and household costs, but the conditions need to be met throughout.

Care fees are another point to think about. A local authority may look closely at a property gift if it appears to have been made to reduce the amount you pay towards care. However, this is not automatic — they must consider why the gift was made and whether care needs could reasonably have been expected at the time.

The key point is simple: giving away your home does not necessarily mean it is outside your estate. What happens afterwards matters just as much as the gift itself.

A genuine gift of property will normally not trigger Stamp Duty Land Tax (SDLT) if the recipient gives nothing in return and does not take on any mortgage debt. In that case, there is no chargeable consideration and usually no SDLT return to file.

The position changes if there is a mortgage. If your family member takes responsibility for some or all of the outstanding loan, HMRC can treat that debt as the price they have paid for the property.

For example, if you transfer a 50% share in a property with a £200,000 mortgage and the recipient takes responsibility for half of it, the SDLT consideration would normally be £100,000.

From 1 April 2025, residential SDLT rates in England and Northern Ireland are:

The higher rates may apply where the recipient already owns another residential property and the transaction meets HMRC's additional-property conditions.

Certain property transfers between spouses or civil partners connected with divorce, dissolution or legal separation are exempt from SDLT.

The key point: gifting the property itself may not create an SDLT bill, but taking over a mortgage can.

If you genuinely transfer part of a rental property to an adult family member, their share of the rental profits can become taxable on them. Simply passing the rent to them while keeping ownership yourself does not usually shift the tax liability.

However, the transfer can also trigger Capital Gains Tax, because gifts to connected family members are generally treated at market value.

Special rules apply where property is gifted to a child under 18, as the income may still be taxed on the parent.

Landlords should also keep Making Tax Digital for Income Tax in mind. Since 6 April 2026, it applies to qualifying landlords and sole traders with gross qualifying income over £50,000, with lower thresholds following later.

From 6 April 2027, property income will also have separate tax rates of 22%, 42% and 47%.

The key point: transferring rental property can shift the income tax position, but only where there is a genuine change in ownership and entitlement to the rent.

Family property transfers often sound straightforward, but the tax rules can be more complicated than many online guides suggest.

Here are some of the most common myths:

The key point: transferring property to family is not just about changing the name on the title. CGT, SDLT and IHT can all come into play, so it is worth checking the tax position before the transfer goes ahead.

Before you transfer a property to a family member, it is worth checking the tax position first. A small detail, such as an existing mortgage or who will live in the property afterwards, can make a big difference.

• Has the property always been your main home? This can affect how much Private Residence Relief you can claim.
• Who are you giving it to? The tax rules can differ depending on whether the recipient is your spouse, child, another relative or a trust.
• What is the property worth now? HMRC may use market value when working out the tax position, so keep clear evidence of the valuation.
• Is there a mortgage? If the recipient takes on any of the debt, SDLT could become payable.
• Does the recipient already own another property? This could bring the higher SDLT rates into play.
• Will you carry on living there? If you continue to live in the property rent-free after giving it away, it may still be treated as part of your estate for IHT.
• What happens if you die within seven years? It is important to understand the possible IHT consequences before making the gift.
• Could the transfer affect future care fees? A local authority may look at whether assets were given away to reduce care costs.
• Could CGT be due? Some UK residential property disposals must be reported and the tax paid within 60 days of completion.
• Are any tax changes coming up? If the transfer is happening around a Budget or major tax change, check whether the new rules could affect you.
• Does your will still reflect what you want? After transferring a property, it is a good idea to make sure your estate planning still works as intended.

If you are looking to transfer ownership of a property to a family member, it pays to look beyond the paperwork. What works well for one family may not work for another, especially where there is a mortgage, a rental property or plans to continue living in the home.

The best time to understand the tax position is before the ownership changes. A little planning upfront can help you choose a route that fits what you want to achieve and reduce the risk of an unexpected tax bill later.