Last updated: 14 October 2026
Will you pay capital gains tax on a property you gift to your daughter?
Possibly. A gift to your daughter is treated as a sale at market value for capital gains tax, even though no money changes hands. If the property isn’t your main home, for example a buy-to-let or second home, you may owe CGT on the increase in value since you bought it. If it has always been your main home, private residence relief normally makes the gain exempt.
How the gain is worked out
- Take the market value on the date of the gift, ideally from a RICS valuation
2. Deduct what you paid, plus buying costs and capital improvements
3. Deduct any reliefs and the £3,000 annual exempt amount
4. Pay CGT at 18% (basic rate band) or 24% (higher rate) for residential property in 2026/27
Example
You gift a buy-to-let worth £350,000 that cost £200,000, with £10,000 of purchase costs and improvements.
- Gain: £140,000
- Less annual exempt amount: £137,000
- CGT at 24%: £32,880, assuming you are a higher-rate taxpayer
The 60-day rule
You must report the gift and pay the CGT within 60 days of the date of the gift, using HMRC’s UK property CGT service, even though you received no cash.
Gift holdover relief?
Holdover relief, which postpones the gain until your daughter sells, doesn’t usually apply to residential lets. It may apply if the gift goes into a trust, or if the property is a business asset. A gift into a trust has its own inheritance tax consequences.
Your daughter’s position
- She takes over the property at its market value on the day of the gift, which becomes her base cost for any future CGT
- There is usually no stamp duty if there is no mortgage. If she takes over a mortgage, SDLT may be due on that amount, and the additional-property surcharge of 5% can apply if she already owns a home
- If she lives in it as her main home, any future gain may be exempt
Inheritance tax
The gift is a potentially exempt transfer. If you live for 7 years, it falls out of your estate. If you keep living in it or use it rent-free, it’s a gift with reservation and stays in your estate. See gifting your home to your children.
Gift or leave it in your will?
Assets that pass on death get a CGT-free uplift to market value, but they can face 40% IHT. Gifting now can mean CGT now but no IHT after 7 years. We compare both options for your estate.
Record the gift properly
Use a solicitor to transfer the legal title at the Land Registry, and keep the valuation, the transfer documents and your CGT calculation.
Frequently asked questions
Can I sell it to her for £1 to avoid CGT?
No. Sales between connected people are treated as being at market value.
Do I need a valuation?
Yes. HMRC may check the value, so get a professional valuation.
Is a gift to my spouse different?
Yes. Gifts between spouses who live together are free of CGT.
What if I gift part of the property?
CGT applies to the share you gift.
Related: working from home and CGT.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with capital gains on property gifts. See our property tax accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
