Can my mum sell her house and give me the money UK

Selling a property and gifting the proceeds can be an effective way to transfer wealth within a family. If your mum sells her house and gives you the money, this action could have several financial, legal, and tax implications. This comprehensive guide will explore these considerations in detail, ensuring that such a transaction is handled smoothly and complies with UK laws.

Understanding the Basics

When your mum sells her house and gives you the money, the process involves several key steps:

  1. Selling the House: This includes listing the property, finding a buyer, and completing the sale.
  2. Gifting the Money: This involves transferring the proceeds from the sale to you as a gift.

Each of these steps has its own set of considerations, from legal requirements to tax implications.

Selling the House: Key Considerations

1. Valuation and Listing

Valuation: Before listing the property, it’s essential to get an accurate valuation. This can be done through estate agents or professional valuers.

Listing the Property: Once valued, the property needs to be listed on the market. Your mum can use an estate agent or sell it privately.

2. Legal Process

Conveyancing: Hiring a conveyancing solicitor is crucial to handle the legal aspects of the sale. They will manage contracts, liaise with the buyer’s solicitor, and ensure the sale complies with legal requirements.

Contracts and Completion: The solicitor will draft the sale contract. Once terms are agreed upon, the contract is exchanged, and the sale is completed on the agreed date.

3. Financial Considerations

Sale Proceeds: After selling the house, your mum will receive the proceeds from the sale. This amount is subject to deductions such as mortgage repayments, if any, and selling costs like estate agent fees and legal fees.

Gifting the Money: Key Considerations

1. Understanding Gifting Rules

No Limits on Gifts: In the UK, there is no limit on how much money can be given as a gift. However, large gifts may have tax implications.

Gift Tax: The UK does not have a specific gift tax, but large gifts can be subject to Inheritance Tax (IHT) if the giver passes away within seven years of making the gift.

2. Inheritance Tax (IHT)

Seven-Year Rule: Gifts given more than seven years before the giver’s death are generally exempt from IHT. If your mum passes away within seven years of giving you the money, the gift may be subject to IHT.

Potentially Exempt Transfers (PETs): Gifts made within seven years are known as PETs. The amount of IHT payable reduces on a sliding scale if the giver survives between three and seven years after making the gift.

Annual Exemption: Each tax year, an individual can give away up to £3,000 without it being added to the value of their estate. This is known as the annual exemption.

Small Gifts: In addition to the annual exemption, small gifts up to £250 to any number of people are exempt.

Regular Gifts from Income: Gifts made out of surplus income, rather than capital, can also be exempt, provided they do not affect the giver’s standard of living.

3. Financial Planning

Financial Independence: Ensure that your mum remains financially independent after gifting the money. Selling her house and giving away the proceeds should not compromise her financial security.

Professional Advice: Consulting with a financial advisor or tax specialist can provide tailored advice and ensure compliance with tax regulations.

Practical Steps for Selling and Gifting

Step 1: Property Sale

  1. Valuation: Obtain a professional valuation of the property.
  2. Estate Agent: Choose a reputable estate agent to list the property.
  3. Legal Support: Hire a conveyancing solicitor to handle the sale.
  4. Marketing: Market the property to attract potential buyers.
  5. Negotiation: Negotiate offers and agree on a sale price.
  6. Contract Exchange: Exchange contracts and set a completion date.
  7. Completion: Complete the sale and receive the proceeds.

Step 2: Gifting the Proceeds

  1. Determine Amount: Decide on the amount to be gifted.
  2. Understand Tax Implications: Be aware of the potential IHT implications and exemptions.
  3. Financial Security: Ensure your mum retains enough funds for her needs.
  4. Documentation: Keep clear records of the gift, including dates and amounts.
  5. Consult Professionals: Seek advice from a financial advisor or tax specialist.

Legal and Financial Implications

Legal Implications

Deprivation of Assets: If your mum requires long-term care in the future, the local authority may investigate the timing and intention behind the gift to determine if it was made to avoid care costs. This is known as deprivation of assets.

Living Arrangements: If your mum continues to live in the house after selling it to you, formalizing her living arrangements through a lease or life interest can provide clarity and legal protection.

Documentation: Proper documentation of the sale and gift is essential. This includes contracts, transfer records, and any legal agreements regarding living arrangements.

Financial Implications

Capital Gains Tax (CGT): If your mum’s house has increased in value since she bought it, she might be liable for CGT on the sale. However, if it has been her principal private residence, she may be exempt.

Inheritance Tax (IHT): As previously discussed, IHT implications are significant when gifting large sums of money. Understanding the seven-year rule and available exemptions is crucial.

Impact on Benefits: If your mum receives means-tested benefits, gifting the proceeds may affect her eligibility. It’s important to consider how the gift might impact her financial situation.

Alternatives to Selling and Gifting

1. Equity Release

Equity release allows your mum to access the value of her home without selling it. Common options include lifetime mortgages and home reversion plans. This can provide funds while allowing her to continue living in her home.

2. Setting Up a Trust

Placing the property or proceeds into a trust can protect assets and provide control over how they are used. Trusts can be complex and require professional advice to set up correctly.

3. Direct Inheritance

Rather than gifting the money now, your mum can leave the property to you in her will. This might be more tax-efficient, especially if the seven-year rule for IHT is not achievable.

Case Studies

Case Study 1: Successful Gifting

Background: Jane sells her house for £300,000 and gifts the proceeds to her son, Tom. She moves into a smaller rented flat.


  1. Valuation and Sale: Jane gets her house valued and sells it for £300,000.
  2. Gift Transfer: She transfers the sale proceeds to Tom and documents the gift.
  3. Tax Planning: Jane consults a tax advisor to understand IHT implications and utilizes her annual exemption.

Outcome: Jane retains enough funds for her living expenses, and Tom receives the gift without immediate tax consequences. Jane survives for more than seven years, so the gift is exempt from IHT.

Case Study 2: Facing IHT Consequences

Background: Alan sells his house for £400,000 and gifts the money to his daughter, Emily. Unfortunately, Alan passes away four years after making the gift.


  1. Valuation and Sale: Alan sells his house for £400,000 and gifts the proceeds to Emily.
  2. Tax Planning: Alan fails to consult a tax advisor and is unaware of the potential IHT implications.
  3. IHT Liability: Alan passes away within four years, and the gift is subject to IHT.

Outcome: The gift is included in Alan’s estate, and Emily faces an IHT bill. The sliding scale reduces the amount, but a significant tax liability remains.

Practical Tips for a Smooth Process

  1. Early Planning: Plan the sale and gift well in advance to maximize tax efficiency and avoid deprivation of assets issues.
  2. Professional Advice: Engage with solicitors, financial advisors, and tax specialists to navigate the complexities and ensure compliance.
  3. Clear Documentation: Maintain thorough records of all transactions and agreements to provide evidence and clarity.
  4. Transparent Communication: Discuss plans openly with family members to avoid misunderstandings and disputes.


Selling a house and gifting the proceeds to a family member is a complex process that involves careful planning and consideration. By understanding the legal and financial implications, seeking professional advice, and following a structured approach, you can ensure the transaction is handled smoothly and in compliance with UK laws. This strategy can provide financial benefits and peace of mind for both the giver and the recipient, fostering a supportive and secure family environment.

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