Conveyancing
Deed of Gift: Transferring Property to Family
By Faizal Lunat · 10 September 2026 · 6 min read
Gifting a house or a share of one to a child or relative is straightforward to document, but the tax and care fee implications need thinking through first.
A deed of gift transfers property from one person to another for no payment. The most common examples are a parent gifting a house or a share of it to a child, or a relative transferring land within the family. The legal mechanics are simple. The consequences deserve more thought than people usually give them.
What the process involves
- Checking the title at HM Land Registry and confirming there are no restrictions preventing the transfer
- Obtaining the lender's written consent where there is a mortgage
- Preparing the transfer deed and, where appropriate, a declaration of trust setting out shares
- Arranging correct signature and witnessing
- Dealing with any Stamp Duty return and registering the new ownership
Inheritance tax and the seven year rule
A gift of property is a potentially exempt transfer for inheritance tax. If you survive seven years from the date of the gift, it falls out of your estate. If you die within that period, its value is brought back into account, with taper relief reducing the tax after three years.
The trap: giving it away but still living there
If you gift your home to your children but continue to live in it rent free, the gift with reservation of benefit rules usually treat the property as still yours for inheritance tax, no matter how many years pass. This is the single most common mistake people make, and it is worth taking advice before doing anything.
Other consequences to weigh up
- Capital gains tax may be payable by you on a gift of anything other than your own main home, based on market value
- The recipient may face higher rate Stamp Duty on a future purchase if they now own a property
- If a mortgage is taken over as part of the gift, Stamp Duty can be payable on that debt
- The property becomes exposed to the recipient's divorce, bankruptcy or creditors
- Gifting to avoid future care fees can be set aside by the local authority as a deliberate deprivation of assets
Getting it done properly
We will check the title, obtain any consent needed, explain the tax position in plain English and prepare the deed correctly. Where the parties have different interests, for example where one is giving and one is receiving, we will tell you if separate independent advice is needed. Speak to us before you commit to anything.
Frequently Asked Questions
- What is a deed of gift?
- A legal document transferring property from one person to another for no payment, commonly used when a parent gifts a house or a share of it to a child.
- Can I gift my house and carry on living in it?
- You can, but if you live there rent free the gift with reservation of benefit rules usually keep the property in your estate for inheritance tax however long you survive.
- Is Stamp Duty payable on a gift of property?
- Not on the gift itself where nothing is paid, but it can be payable if the recipient takes on mortgage debt as part of the transfer.
- Does gifting property protect it from care fees?
- Not reliably. A local authority can treat a gift made to avoid care costs as a deliberate deprivation of assets and assess you as though you still owned the property.
This article is general information, not legal advice. For advice on your own circumstances, speak to a Solicitor & Director on 07449 567711.
