Should I give my home to my children?

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Your home may be the most valuable asset in your estate and certainly offers you significant security. You may be considering signing over your property to your children during your lifetime as an estate planning tool or perhaps as a means of saving care home fees. It is important you consider the possible consequences of making such a gift and the reasons why it may be inadvisable.

Inheritance tax saving:

If you give your house to your children although remain living in the property you will not avoid inheritance tax, even if you are not the legal owner. You may be familiar with the ‘7 year rule’ stating you can make a gift and if you survive for 7 years you will not pay inheritance tax on the gift.

It is unlikely this will apply to the gift of your house if you are still living there as this will be caught by the ‘gift with a reservation of benefit’ rules. According to the rules the house will remain a part of your estate for tax, even if you live beyond 7 years from making the gift.

One way the house may fall outside your estate is if you pay a rent to your children to continue living in the property, but, this must be a full market rent. Your children will then be liable for income tax on the rent you pay to them.

Deprivation of Capital:

If you transfer your property to your children to avoid care home fees the local authority may consider you have deliberately deprived yourself of assets and refuse to pay your care home fees.

You may also be considered to have deprived yourself of assets if you transfer your property into a so-called ‘asset or family protection trust’ and you should take careful advice before transferring assets to any trust.

Personal circumstances of your children:

Once you sign your property over to your children you will no longer be the legal owner. This means that if you fall out with your children you could potentially be evicted.

Your child may lose any entitlement they have to means tested benefits if the home is transferred to them.

Equally you could lose your home if your child has an issue with bankruptcy or divorce or they die before you as your home is their asset.

In conclusion the gift of a property involves complex tax and other financial implications and you should seek legal advice if you are contemplating such a gift.

If you would like to contact our Tax, Trusts and Estates team please call 01273 324 041 or email

Should I give my home to my children | Brighton Solicitors


Should I give my home to my children?

Author: Emma Weir, LLP Partner and member of the Tax, Trusts and Estates Team