Parents can sell their property to their children for £1 – but there are “significant” implications.

Parents could consider selling their homes to their offspring for as little as £1, but an expert has warned of the “significant” consequences that come with such a decision. While it’s “technically” feasible, Terry Fisher, real estate specialist at We Buy Any Home, points out that the deal involves more than just handing over the keys for a nominal sum. He points out that potential inheritance tax and capital gains tax liabilities also need to be considered.

Fisher clarifies, “Technically, you wouldn’t be selling it to your child, rather you would be gifting the property. In this case, the asking price of £1 is a token, known as a counterpart.” He added: “The change of ownership would qualify as a ‘gift’, so while it’s technically possible to sell a house to your child for just £1, it’s important to understand the implications,” the Express reports .

“The property transfer process can be complicated, time-consuming and expensive. A home is a significant asset with legal and financial implications for both parties involved. When one is given as a gift, it is vital to ensure that the transfer of ownership is done legally and through the correct channels.”

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It is essential that the transfer of title is legally recognized and individuals are advised to engage a solicitor to transfer the deeds legally, similar to a standard sale to a new buyer. Mr Fisher stressed the importance of understanding the tax consequences when giving property: “It is essential to be clear about any tax implications for you and the recipient. If you are giving a house as a gift to avoid inheritance tax in the future, be aware that the recipient may be liable to pay this tax if you die within seven years.”

He also warned of potential capital gains tax liabilities: “As a previous owner, you may still be liable to pay capital gains tax when you offer a home. This may be the case if the value of the property has increased since you first purchased it.’

The need to consider Stamp Duty was highlighted for those gifting an existing home owner: “They may have to pay Stamp Duty if they take over an outstanding mortgage on the gifted home.”

Mr Fisher advised people to think about their own financial well-being before going ahead with such a gift: “If you’re giving tenants a house you’re currently renting out, consider how it will affect you current income”.

He also urged individuals to make sure the recipient is financially prepared to be a homeowner: “Think about regular bills, maintenance and upkeep costs before deciding if it’s the right gift for them.”

Finally, he warned of long-term financial effects: “Although the initial sale price may be small, there may be future financial repercussions.”

Mr Fisher warned: “Transferring ownership of a property to a child for a nominal sum could affect their eligibility for mortgages or loans in the future. Creditors may question the validity of such transactions and may require additional documentation or assurances.”