Stamp Duty on Gifted Property: When You Do and Don't Pay

Gifting a property — whether from parent to adult child, between spouses, or between cohabiting partners — has become an increasingly common feature of family life as the UK's housing wealth has accumulated. The SDLT consequences are often misunderstood. The shorthand answer is that a true gift, with no money or debt changing hands, is outside SDLT entirely. But the moment a mortgage is involved, the rules can produce a chargeable transaction even though no cash has been paid. Here's how it works.

The pure gift: no SDLT

If a property is transferred from one person to another for no consideration — no money paid, no debt assumed, no obligation taken on — there is no chargeable consideration for SDLT purposes, and no SDLT return is required.

Example: a parent owns a £350,000 flat outright (no mortgage). They transfer it to their adult son for £0. No SDLT is payable. Note that other taxes may apply — inheritance tax under the seven-year rule, capital gains tax for the parent — but SDLT is not one of them.

The mortgaged gift: SDLT on the debt

If the recipient takes on (or is added to) an existing mortgage on the property, the outstanding mortgage value is treated by HMRC as "chargeable consideration". SDLT is calculated on the value of the debt assumed — even though no cash has moved.

Example: a parent transfers a £400,000 house with a £180,000 mortgage to their son. The son takes on the mortgage. SDLT is calculated as if he had bought the house for £180,000. At current standard rates that's £1,100 (2% on £55,000). If the son already owns another property, the additional-dwelling surcharge of 5% would also apply to the £180,000, adding £9,000.

Equity transfers between spouses and civil partners

Married couples and civil partners enjoy no special blanket exemption from SDLT — but the practical effects are usually the same as a pure gift, because most inter-spousal transfers involve no consideration. Where a mortgage is involved, the proportional debt-assumption rule applies just as it does between unrelated parties. Couples often unknowingly trigger SDLT when adding a partner to the deeds of a mortgaged property, particularly where the property is high-value.

Cohabiting partners

Cohabiting (unmarried) partners have no special status under SDLT. If one partner gifts a share of a mortgaged property to the other, the recipient's assumed debt is chargeable consideration on the standard basis. There's no spousal exemption.

Parents to adult children: the most common scenario

The most common gift in practice is a parent helping an adult child onto the ladder. Where the parent owns outright and gifts the property cleanly, no SDLT arises. Where there is still a mortgage — and the child takes it on — SDLT applies to the debt. If the child already owns a property, the 5% surcharge applies on top.

Many parents instead opt for a partial gift of equity — for example, the parent gives the child a £100,000 equity stake to support a deposit, but doesn't actually convey title. In that case there's no property transfer at all, and no SDLT, because nothing has been conveyed.

Inheritance tax: a separate question

A gift of property still counts as a Potentially Exempt Transfer for inheritance tax purposes. If the donor dies within seven years of the gift, the value may be added back into their estate. SDLT and IHT are separate regimes — paying SDLT (or not paying it) on a gift has no effect on the IHT analysis, and vice versa.