Updated October 2026 · Fraser Bond
Tax · Family transfers
Selling your house for £1
CGTmarket value
IHT7 years
SDLTon price paid
Reservationof benefit
In short: You can legally sell your house to your son for £1, but for tax HMRC treats a transfer to a connected person at market value. If it isn't your main home, capital gains tax may be due on the gain. The undervalue is a gift for inheritance tax, which falls out of your estate only if you survive seven years, and not at all if you keep living there rent-free (a gift with reservation of benefit). Your son pays stamp duty on any price he actually pays or mortgage he takes over. A mortgage lender must agree. Take legal and tax advice first.
| Tax | Effect |
|---|---|
| Capital gains tax | Based on market value; main home relief may apply |
| Inheritance tax | Gift of the undervalue; 7-year rule |
| Stamp duty | On the price paid plus any debt taken over |
| Living there after | Gift with reservation unless you pay market rent |
Tax effects
Frequently asked questions
Is selling my house for £1 legal?
Yes, but tax applies at market value.
Can I still live there?
Only by paying market rent, or it may stay in your estate.
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