Gifting a property to my children – what do I need to know?

When you sell or gift an asset such as a property, any profit you make (usually referred to as a ‘gain’) will be subject to the capital gains tax (CGT) regime.

Parents and children are classed as “connected persons”. This means that any transactions between them is deemed to take place at market value for CGT purposes. This means any payment between connected persons is effectively ignored, and market value is put into the calculation of the capital gain instead.

If you sell the property for half of what it’s worth, you will still be taxed as if you’d sold it for its current market value.

Any taxable gain would be subject to CGT at 18% if you are a basic rate taxpayer and 24% if you are a higher or additional rate taxpayer (2026/27).  

Note that even if you are a basic rate taxpayer, if the gain pushes you into the higher rate band, you could pay 24% on some or all the gain.  

Are there ways to reduce my CGT bill? 

You can deduct the Annual Exempt Amount (AEA) from your gain before calculating any CGT due. The AEA is £3,000 for 2026/27. Most people are entitled to the AEA each tax year. The AEA works in a similar fashion to personal allowances for income tax purposes, in that gains within the AEA are tax-free.  

You could potentially reduce your gain by gifting half of the property it to your spouse or civil partner before the transfer to your son and his wife.  

If your spouse or civil partner is a basic rate taxpayer and the gain would otherwise push your income into the higher rate tax band, gifting half of the asset to your spouse or civil partner would take advantage of your spouse’s remaining basic rate band. The transfer from you to your spouse or civil partner would not trigger any CGT because transfers between spouses and civil partners happen at no-gain-no-loss. 

On the subsequent transfer to your son and his wife, the proceeds would be shared between you and your spouse and would then take advantage of your spouse’s remaining basic rate band. 

You would also then be able to make use of your spouse’s AEA.  

What about other taxes? 

If you’re considering transferring the title of a property, you will need to take advice from a conveyancer. You would also need to consider land and property taxes, which differ in the nations of the UK: 

• England and Northern Ireland – Stamp Duty Land Tax  
• Wales – Land Transaction Tax 
• Scotland – Land and Buildings Transaction Tax 

Our team at TaxAssist Accountants would be happy to discuss the tax implications of transferring and gifting assets in more detail and give you an estimate of your capital gains tax position. Please contact us for more information or call 01628 617100. 

 

Last updated 13 Jul 2026 | First published 6 Jul 2018

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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