Passing property between family members isn’t unusual in the UK—whether it’s part of estate planning, a gift, or support for a relative. But while it may seem simple, the process needs careful attention. Understanding how to transfer property ownership between family members ensures you’re protected legally and financially.
Why Transfer Property to a Family Member?
There are several reasons why someone might transfer property to a relative:
- To help children get on the property ladder
- As part of inheritance or estate planning
- To reduce Inheritance Tax liability
- As a gift during your lifetime
While well-intentioned, these transfers can have financial and legal consequences—especially when it comes to tax, mortgages, and benefits.
Types of Property Transfers Within Families
The transfer method depends on the circumstances. The main types include:
1. Transfer as a Gift
Giving a property as a gift is common, particularly to children. However, this could trigger Capital Gains Tax (CGT) if it’s not your main home. There may also be Inheritance Tax (IHT) implications if you pass away within seven years of the gift.
2. Transfer for Money (Sale or Part Sale)
This is when you sell the property at full price or at a discount. Even a discounted sale counts as a sale for tax purposes, which may still involve CGT.
3. Transfer to a Spouse or Civil Partner
Transfers between spouses or civil partners are usually exempt from Capital Gains Tax. This makes a spouse property transfer a tax-efficient way to change ownership, particularly in estate planning.
Steps to Transfer Property Ownership
1. Agree on the Type of Transfer
Decide whether it’s a gift, sale, or part of a will or trust. Each has different legal and tax implications.
2. Get a Property Valuation
Even if no money changes hands, a valuation is key. HMRC uses it to assess Capital Gains Tax and Stamp Duty Land Tax (SDLT).
3. Check Mortgage and Lender Approval
If there’s a mortgage on the property, you’ll need the lender’s consent. They may require the new owner to take out a new mortgage or be added to the existing one.
4. Hire a Solicitor or Conveyancer
A legal professional will:
- Draft or update the Title Deed
- Manage Land Registry paperwork
- Handle tax declarations if needed
While DIY transfer forms exist, mistakes can be costly. A solicitor ensures your interests are protected.
5. Notify the Land Registry
The Land Registry must be updated with the new owner’s name. The solicitor will submit the TR1 form, along with the appropriate fee.
Key Costs Involved
Transferring property isn’t free. Here’s what you might expect:
- Solicitor fees: £300–£1,500, depending on complexity
- Land Registry fee: £20–£910 (based on property value)
- Stamp Duty Land Tax: Only if money or mortgage is involved
- Capital Gains Tax: If the property isn’t your main home
Things to Watch Out For
- Gifting property can affect eligibility for benefits or care cost assessments.
- Transfers made shortly before death might still be subject to Inheritance Tax.
- Gifts made to reduce your assets for assessment from the council, in order to get your care home fees paid by the state, is called ‘deprivation of assets’ and is a criminal offence.
- Mistakes in forms or legal documents can cause delays or rejections.
Final Word
Transferring property between family members can be a generous and meaningful decision—but it needs careful planning. From tax rules to legal paperwork, every detail matters. Get professional advice to avoid surprises and protect what’s important. Need clarity before taking action? Speak to a solicitor to ensure you’re doing it right.
