FAQ
Can I Sell My Flat to a Family Member?
Yes, at any price you both agree, and it is done every day. What catches people out is that a sale between relatives is not treated like any other sale. The tax rules look through the price you choose to the flat's market value, a discount counts as a gift with a seven-year tail, your lender and your relative's lender each have a say, and you cannot share a solicitor. This page sets out the three ways to do it, the tax on each side, what the lenders want and the leasehold formalities that still apply.
The Short Answer
A family sale removes the two things sellers dislike most about the market: strangers and uncertainty. It replaces them with a different set of questions, mostly about tax, and the answers depend on the price you choose, whether the flat was your home and whether you plan to stay in it. None of it is difficult, but it has to be thought through before the price is agreed rather than after, because the discount that feels generous at the kitchen table can be an inheritance tax problem if you die within seven years.
This page covers a leasehold flat in England and Wales sold or given to a relative: a child, parent, sibling or grandchild. The tax figures are for 2026/27 and are verified against gov.uk; the next Budget is on 28 October 2026, so check the rates if you are reading this later. Where the relative is your spouse or civil partner, different and simpler rules apply, noted where relevant. This is general information, not tax or legal advice, and a family sale is one of the cases where an hour with an accountant pays for itself.
Three Ways to Do It
The price decides which of three transactions you are doing, and each has its own paperwork and tax shape.
- A sale at full market value. The simplest. Your relative pays what anyone else would, usually with a mortgage, and the only difference from an ordinary sale is that there is no agent and no chain. Tax is exactly as for any sale. This suits a parent who needs the money, for example to fund a move or care, and a child who can raise the full price.
- A sale at a discount. Lenders call this a concessionary purchase. Your relative pays less than the flat is worth, and the difference is a gift from you. It is the most common family arrangement, because the discount can serve as your relative's deposit, but it is also the one with the most tax consequences, which the rest of this page sets out.
- An outright gift or transfer of equity. No money changes hands, or your relative is added to the title alongside you. There is no sale and usually no stamp duty, but the capital gains and inheritance tax rules apply in full, your mortgage still has to be dealt with and the gift is permanent. Transfers between spouses and civil partners sit outside most of these rules.
Whichever you choose, fix the market value first with an independent valuation from a RICS surveyor, not an estate agent's appraisal. HMRC, your relative's lender and your own solicitor will all want a figure they can rely on, and a written valuation settles arguments later about what the gift was worth. Our guide to valuing a leasehold flat explains what moves the figure.
Stamp Duty for the Buyer
Stamp duty land tax is your relative's cost, not yours, and for an individual buyer it is charged on what they actually give for the flat, not on its market value. That means the price paid plus any mortgage debt they take over from you. A pure gift with no mortgage attached has no chargeable consideration, no stamp duty and no return to file. Where a mortgage of £40,000 or more is taken over, a return is needed even if no tax is due. A sale at £240,000 on a flat worth £300,000 is charged on £240,000.
The residential rates in force since 1 April 2025 are nil to £125,000, 2 percent to £250,000, 5 percent to £925,000, 10 percent to £1.5 million and 12 percent above. On the £240,000 example that is £2,300. If your relative has never owned a home and will live in the flat, first-time buyer relief applies and the duty on a price up to £300,000 is nil, with 5 percent on the part between £300,001 and £500,000 and no relief at all above £500,000; buying from a parent does not disqualify them. If they already own another home anywhere in the world and are not replacing it, the additional dwellings surcharge of 5 percentage points applies on top of every band. The return and payment are due within 14 days of completion.
Capital Gains Tax for You: Market Value, Whatever the Price
This is the rule that surprises most families. Where a sale is between connected persons, which includes parents, children, grandchildren, siblings and their spouses, HMRC treats it as made at market value however little money changes hands. Sell a flat worth £300,000 to your daughter for £240,000, or give it to her for nothing, and your gain is worked out as if you had received £300,000. The discount does not reduce the tax. HMRC's capital gains manual sets the rule out.
Whether that matters depends on what the flat has been to you. If it has been your only or main home for the whole time you owned it, private residence relief covers the gain and there is nothing to pay. If it was let, a second home or an inherited flat, or you moved out more than nine months before the sale, tax is due on the part of the gain not covered by relief, at 18 percent within your unused basic rate band and 24 percent above, after the £3,000 annual allowance. The gain is the market value less what you paid, your buying and selling costs and the cost of any lease extension. Our guide to capital gains tax when selling a flat has a worked example.
Two timing points. Any tax has to be reported and paid within 60 days of completion through HMRC's online service, and the disposal falls in the tax year in which contracts are exchanged, not completed. One trap for the generous: if the market value is below what you paid, the loss on a sale to a connected person can only be set against gains on other disposals to the same person, so it is of little use. Sales and gifts between spouses and civil partners are free of capital gains tax altogether.
Inheritance Tax, the Seven-Year Rule and Care Fees
For inheritance tax, the discount is a gift. Gov.uk's guidance on gifts says so in terms: money you lose by selling something for less than it is worth counts as a gift. Sell the £300,000 flat for £240,000 and you have made a £60,000 gift; give it away and the gift is £300,000. A gift to an individual is a potentially exempt transfer. If you live seven years from the date of the sale it drops out of your estate entirely. If you die within seven years it comes back in, and where your gifts in those seven years exceed the £325,000 nil rate band, the tax on the gift tapers from the full 40 percent down to 32, 24, 16 and 8 percent in years three to seven. The nil rate band and the £175,000 residence nil rate band are frozen until 5 April 2031.
The trap is the gift with reservation. If you give or part-give the flat to your child and carry on living in it without paying a full market rent, HMRC treats the flat as still yours for inheritance tax however many years pass, and the seven-year clock never starts. Paying a market rent avoids this but creates taxable income for your child, and a separate income tax charge, the pre-owned assets charge, can catch arrangements designed round the rule. If the plan is to stay in the flat, take advice before signing anything.
Care fees are the other thing to think about. If you later need council-funded care, the council's financial assessment can treat a flat you sold to family at a discount as still yours, under the deprivation of assets rules, if it decides the purpose was to reduce what you would pay. There is no time limit on how far back it can look. A sale at a genuine price for a genuine reason is not deprivation, which is one more argument for a written valuation and a record of why the sale happened.
The Mortgages: Yours and Theirs
Your own mortgage has to be repaid on completion, or your lender has to agree to something else, exactly as in any sale. A family discount does not change what you owe. If the price you have agreed will not cover the mortgage, you are into a shortfall sale and need your lender's written consent; the negative equity FAQ explains how that works. Where a relative is being added to the title rather than buying outright, the lender has to agree to them joining the mortgage, which means a full application.
Your relative's lender is usually the bigger hurdle. Most mainstream lenders will lend on a concessionary purchase and will treat the discount as the buyer's deposit, so a child buying a £300,000 flat for £240,000 may need little or no cash of their own; a few insist on some personal cash as well. The lender instructs its own valuer and lends against the lower of its valuation and the price, so if the valuer says £280,000 the gifted deposit shrinks. Expect the lender to ask you to sign a letter confirming the discount is a gift, not a loan, and that you will have no interest in the flat afterwards. Most will also refuse to lend if you intend to carry on living there, which is one more reason the stay-in-the-flat plan needs care. Our guide to mortgage lenders and lease length covers the leasehold side of what a lender will accept.
The Conveyancing: Why You Need Two Solicitors
A solicitor cannot act for both sides of a sale where the interests conflict, and a sale at a discount between relatives is the textbook case: one party is giving value away and the other is receiving it. Your relative's lender will insist on independent advice in any event. So you each instruct your own solicitor, and the one acting for you will want to be satisfied that you understand what you are giving up and are not under pressure. Treat that as protection rather than red tape; it is what stops a family sale being unpicked later.
Two legal points your relative's solicitor will raise. A transfer for significantly less than market value can be set aside by a trustee in bankruptcy if you are made bankrupt within five years, under section 339 of the Insolvency Act 1986, and where the buyer is a relative the law presumes you were insolvent at the time unless shown otherwise. The usual answer is a short statutory declaration of solvency from you and, where a lender requires it, an indemnity policy. Separately, HM Land Registry registers the transfer at the stated price, so the figure on the transfer deed should be the real one.
The leasehold formalities do not disappear because the buyer is family. If the lease requires the freeholder's consent, a licence to assign is still needed and the freeholder can still ask for references; the freeholder's permission FAQ explains. The buyer still serves a notice of transfer and signs any deed of covenant, the management pack is still ordered and service charge and ground rent are still apportioned on completion. An EPC still has to be given to the buyer even though nothing was marketed. The difference is only that nobody is negotiating over any of it.
Special Cases
A beneficiary buying a flat from an estate
Where an executor sells a flat to one of the beneficiaries, the estate is the seller and the price has to be defensible to the other beneficiaries, so a market valuation is needed and the sale is usually at that figure, with the buyer's share of the estate set against the price. Capital gains tax is on any rise since the date of death, not since the deceased bought. Our probate Top 10 and the guide to selling a probate flat cover the process.
Transfers on divorce or separation
A transfer between spouses or civil partners as part of a divorce is free of capital gains tax where it happens within three years of the end of the tax year of separation or under a court order, and stamp duty does not apply to a transfer made under a court order or formal separation agreement. The lender still has to release the departing partner from the mortgage. The divorce and separation guide explains the options.
Selling to a child who will live there with you
This is the arrangement that runs into every rule at once: the gift with reservation for inheritance tax, most lenders' refusal to lend where the seller stays in occupation and the care fees question. It can be done, with a market rent or a formal share of ownership, but it needs an accountant and a solicitor in the room before the price is agreed, not after.
When a Cash Buying Company Fits Better
A family sale works when the relative can raise the money, or when you can afford to give part of the value away. It does not work when neither is true: a child who cannot get a mortgage on the flat, a parent who needs the full proceeds for care or a move or a short lease or cladding problem that a mainstream lender will not accept even at a discount. In those cases the flat has to be sold to someone else, and the family can still help by lending or gifting part of the proceeds afterwards, which is simpler to tax than a discounted sale.
We buy at 15 to 30 percent below market value, in cash, with no mortgage valuation to pass and completion in three to six weeks. For a flat a lender would not touch, that can be a better outcome than a family sale that falls apart at the valuation stage. The cash buyer Top 10 explains how the route works, and the below-market-value FAQ shows what you would be left with.
Related Reading
For the capital gains sums, see the capital gains tax guide. For a sale that will not clear the mortgage, see the negative equity FAQ. For the consents and notices that still apply, see the freeholder's permission FAQ.
Further FAQs
You can, but it is a gift in all but name and is taxed as one. Stamp duty would be nil, since it is charged on the £1 plus any mortgage your child takes over. Capital gains tax, if the flat was not your main home throughout, is worked out as if you had sold at full market value, because you and your child are connected persons. And for inheritance tax the whole value less £1 is a gift that stays in your estate if you die within seven years, or for ever if you carry on living there without paying rent. If the aim is simply to give the flat away, a straightforward transfer with a proper valuation on file is cleaner than a token price.
On the price they pay, plus any mortgage they take over, not on the market value. A child buying a £300,000 flat for £240,000 is charged on £240,000, which is £2,300 at the standard rates. If they have never owned a home and will live in the flat, first-time buyer relief takes the duty on a price up to £300,000 to nil, and buying from a parent does not disqualify them. If they already own another home and are keeping it, the 5 percentage point additional dwellings surcharge applies instead. The return is due within 14 days of completion whether or not tax is payable.
Yes. A solicitor cannot act for both sides where their interests conflict, and a sale at a discount between relatives is exactly that: one of you is giving value to the other. Your relative's lender will require them to have independent advice in any case, and your own solicitor's job is to confirm you understand what you are giving away and are doing it freely. Two solicitors cost more than one, but it is the cost of a transfer that cannot be challenged later by a lender, a trustee in bankruptcy or another member of the family.
You can agree it between you, but it undoes most of the benefits. For inheritance tax, staying on without paying a full market rent is a gift with reservation, so the flat stays in your estate however long you live. Most lenders will not lend to your child at all if you are staying in occupation. And the council can look at the arrangement if you later need care. Paying your child a market rent solves the inheritance tax point but gives them taxable rental income. If living there is the plan, get advice before the price is agreed; there are better structures, such as a formal share of ownership, but they need setting up properly.
Usually, yes. Most mainstream lenders accept a concessionary purchase from a family member and treat the discount as the deposit, so a 20 percent discount can mean your child needs no cash deposit at all. The lender instructs its own valuer and lends against the lower of the valuation and the price, so the discount only counts to the extent the valuer agrees with your figure. Expect to sign a gifted deposit letter confirming the discount is a gift, that you expect nothing back and that you will not live in the flat. A short lease, cladding or an unusual block can still cause a refusal, exactly as on any purchase.
Two separate rules apply. For inheritance tax, the discount you gave is a gift that comes back into your estate if you die within seven years, with taper relief from year three where your gifts exceed the nil rate band. For care fees, the council's financial assessment can treat the discount as deliberate deprivation of assets, and count the value as still yours, if it decides a significant reason for the sale was to avoid care costs. There is no seven-year limit on that; the council looks at your intention at the time. A sale at a sensible price, for a reason you can show, with a valuation on file, is the best protection on both counts.
Only in the ways the lease already requires. A sale to a relative is an assignment of the lease like any other, so if the lease needs the freeholder's consent a licence to assign is still required, the buyer still serves a notice of transfer after completion and signs any deed of covenant and the management pack is still ordered for the buyer's solicitor and lender. The freeholder cannot object to a sale because the buyer is family, and the fees are the same. The freeholder's permission FAQ sets out what applies.
Not without your lender's written agreement. The mortgage has to be repaid on completion, and a sale price below the balance leaves a shortfall the lender must consent to and that you still owe afterwards. Lenders look harder at a below-value sale to a relative, since the price has been chosen rather than tested by the market, so expect to show a valuation and a reason. A simpler route is often for your child to pay enough to clear the mortgage and for you to gift them money separately later, if you can. The negative equity FAQ covers shortfall sales in detail.