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Gifting property: what taxes do you need to pay?

  • 2 min read
  • Last updated 23 Jun 2022

Gifting property is not always tax-free. Depending on its value and who you give it to, you might need to pay: CGT, IHT, stamp duty, and more.

Will I pay capital gains tax?

Most likely yes, unless it was your home or you gave it to your spouse.

You can read more in our guide to capital gains tax for gifted property.

You might also want to check our our capital gains tax calculator to work out how much you need to pay.

Will I have to pay Stamp Duty?

No.

However, the receiver of the gift has to pay it sometimes:

  • You’re giving it to your spouse: they’ll pay 3% above the normal rate
  • They already own property: same as above
  • If the property has a mortgage on it: the new owner will have to pay stamp duty on the outstanding value of the mortgage.

One thing to note: you need to let the bank know about the gift so they can check that the new owner can afford the mortgage.

To check out what Stamp Duty the receiver might have to pay, use our calculator.

Your situation

Outlined number oneImage of an arrow
I am buying
Property cost
I am

Tax to pay

Outlined number two
  • Your property costs
    £500,000
    0% tax up to £300,000
  • Stamp Duty to pay
    £10,000

How your Stamp Duty Land Tax is calculated

The Stamp Duty you pay is calculated based on the price of the property you’re buying.

In your case, £500,000.

As you’re a first-time buyer, you don’t pay Stamp Duty Land Tax on the first £300,000 of your purchase.

You pay 5% Stamp Duty on amount up to £500,000. For you, this is £10,000.

Your Stamp Duty Land Tax total is £10,000.

Who will pay rental income?

The recipient – they will be the new landlord.

The only exception is if you give property to a child under 18. You will have to pay rental income tax until they come of age.

How about inheritance tax?

Usually there’s no inheritance tax to pay if:

This allowance increases increases to £500,000 if the property is your main home and you’re giving it to your children or grandchildren.

Anything above the IHT allowance will be in most cases taxed at 40%.

You can read more about the inheritance tax rates and allowances here.

Can I still live there?

Yes, but you need to pay rent – at the market rate.

Otherwise the recipient will still have to pay inheritance tax.

Can TaxScouts help with these taxes?

Absolutely.

Simply sign up and we can do your capital gains and rental income tax return.

For Stamp Duty, the property agent or lawyer can do it for you, or you can pay Stamp Duty online by yourself as well.

For inheritance tax, your lawyer can also “apply for probate”, which gives them the right to deal with your property and assets after you pass away.

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