Transferring Overseas Property to Family Members: Tax and Legal Implications

Transferring property to a family member — whether as a gift, sale at a reduced price, or as part of estate planning — is one of the most common requests we encounter from investors looking to simplify their affairs or pass on wealth. It is also one of the areas where the gap between perceived simplicity and actual complexity is widest.

A gift is not a tax-free event. In most cases it is a disposal for capital gains tax, a potential SDLT trigger, and — in many overseas countries — a taxable event in its own right. Done without proper advice, the tax cost of transferring property can exceed the benefit the transfer was intended to achieve.

This guide covers the full picture: UK taxes, overseas gift and transfer taxes, the IHT implications, and the practical considerations for investors in our key markets.

Important: Tax rules in this area are complex and fact-specific. Rates and thresholds change, and the position differs by country. Nothing here constitutes tax or legal advice. Always consult a qualified UK tax adviser and a lawyer in the relevant property country before proceeding.

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UK Capital Gains Tax on Gifting Property

The starting point for any UK-resident donor is that gifting property — whether in the UK or overseas — is treated as a disposal at market value for UK CGT purposes, regardless of whether any consideration changes hands.

If you gift a property to your child, you are deemed to have sold it at its open market value on the date of the gift. CGT applies to any gain above your annual exempt amount (£3,000 for the 2025/26 tax year — significantly reduced from prior years following policy changes).

CGT Rates for Residential Property

As of the 2025/26 tax year:

• 18% for gains falling within the basic rate income tax band
• 24% for gains above the basic rate band (higher or additional rate taxpayers)

These rates apply to UK residential property and — for UK residents — to overseas residential property. For overseas property, foreign CGT paid may be credited against the UK liability under the terms of any applicable double tax agreement, but not all countries have such an agreement with the UK.

The No-Gain, No-Loss Rule for Spouses

Transfers between spouses and civil partners who are living together are treated as no-gain, no-loss disposals. No CGT is due at the time of transfer. However, the receiving spouse acquires the asset at its original base cost — not at the market value at the time of transfer. The gain is deferred, not extinguished; when the receiving spouse later sells or gifts the property, CGT applies to the full gain from the original acquisition cost.

This rule ceases to apply in the tax year of permanent separation — after that, transfers between separated spouses are treated as market-value disposals for CGT.

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Stamp Duty Land Tax (SDLT) on Gifts

SDLT applies to chargeable consideration on a transfer of UK residential property. For a pure gift with no mortgage and no other consideration, there is no SDLT — the chargeable consideration is nil.

However, where the recipient assumes responsibility for a share of an existing mortgage, that mortgage liability constitutes chargeable consideration for SDLT purposes. SDLT is calculated on the value of the mortgage share taken on, not the market value of the property.

The 5% additional-rate SDLT surcharge (raised from 3% on 31 October 2024) applies where the recipient already owns another residential property and is acquiring an additional one — including acquisitions by gift. For higher-value transfers where a mortgage is involved, this can represent a meaningful tax cost.

Note: SDLT applies only to UK property. For overseas property, the equivalent local transfer taxes apply (see below).

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The Seven-Year Rule and IHT

A gift of property to an individual (not into a trust) is a potentially exempt transfer (PET) for UK IHT purposes. The implications:

• If the donor survives seven years after the date of the gift, it falls outside the estate entirely — no IHT applies to it.
• If the donor dies within three years, the gift is fully subject to IHT at 40% (above the nil-rate band).
• If the donor dies between three and seven years, taper relief applies — reducing the IHT charge on the gift incrementally:

Years Between Gift and Death	IHT Rate on Gift (% of full rate)
0–3 years	100% (full 40%)
3–4 years	80%
4–5 years	60%
5–6 years	40%
6–7 years	20%
7+ years	0%

Critical caveat: The gift must be genuine. If the donor continues to live in or benefit from the gifted property without paying a market rent, the reservation of benefit rules apply — the property remains in the estate for IHT regardless of how long the donor survives. This is a common pitfall for parents who gift their home or a holiday property while continuing to use it.

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Overseas Gift and Transfer Taxes by Market

When transferring overseas property, the tax position in the property country is entirely separate from the UK position. In some markets, gift taxes are significant; in others they are minimal or non-existent.

Spain: Impuesto de Sucesiones y Donaciones (ISD)

Spain levies a gift tax on transfers of Spanish assets between living persons. The donee (recipient) is responsible for paying the tax. Rates are set at a national level but autonomous communities have broad powers to apply reductions, and the effective rate varies enormously:

• Madrid: reductions of up to 99% apply for close family members — the effective rate is near zero.
• Other regions: rates can reach 34% at the national tariff before regional adjustments.

The market value of the property at the date of the gift is the tax base. Spanish legal and tax advice is essential before gifting Spanish property — the regional variation makes this a fact-specific question. See our Spain property guide.

Greece: Transfer Tax and Gift Tax

Greece imposes gift tax on transfers of Greek real estate between living persons. For first-degree relatives (children, parents, spouses), a cumulative €800,000 tax-free allowance applies; gifts above that threshold are taxed at 10% of the assessed value. Transfers to other relatives or unrelated parties are taxed at higher rates. A transfer tax (separate from gift tax) may also apply to certain transactions.

UAE: No Gift Tax

The UAE does not levy gift tax or inheritance tax. Transfer of property between family members in UAE freehold zones is subject only to the Dubai Land Department (DLD) transfer fee — typically 4% of the property value, split between buyer and seller (though in gift transactions, the split may be negotiated). Legal title must be transferred at the DLD. See our UAE property guide.

Thailand: Gift Tax on Large Transfers

Thailand does not have a dedicated gift tax in the traditional sense. However, gifts of property (or cash) to non-spouses exceeding THB 10 million (approximately £220,000–£230,000 as of 2026) in a calendar year are taxed as income in the hands of the recipient. Gifts between parents and children up to THB 20 million per year are exempt. For property, the transaction is also subject to transfer fee (2% of appraised value), specific business tax (3.3% if owned less than five years), and withholding tax in the hands of the transferor. See our Thailand property guide.

Indonesia (Bali): Acquisition Duty and Income Tax

Transferring Indonesian property triggers two taxes in the hands of the recipient and transferor respectively:

• BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan): acquisition duty of 5% payable by the recipient on the transaction value above a threshold.
• PPh (Pajak Penghasilan): income tax of 2.5% on the gross transaction value payable by the transferor, based on deemed disposal at market value.

These apply regardless of whether the transfer is a commercial sale or a family gift.

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Transferring Into a Trust

Transferring property into a discretionary trust is not a PET — it is a chargeable lifetime transfer for IHT purposes. The key charges:

• Entry charge: 20% IHT on the value transferred above the available nil-rate band at the time of entry.
• 10-year anniversary charge: up to 6% of the trust's net value every 10 years.
• Exit charge: a proportionate charge when assets leave the trust.

Trusts are a legitimate planning vehicle, but the charges are real and must be factored into any analysis. Trusts can be valuable for holding property for future generations, protecting assets from divorce claims, or managing succession across jurisdictions — but they require professional structuring and ongoing administration.

Bare trusts are treated differently: no immediate IHT entry charge, and the assets remain in the settlor's estate for IHT until the seven-year PET period expires. However, the settlor must have genuinely given up all benefit from the assets.

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Adding or Removing Names From Title

Adding a Name

Adding a co-owner to the title is a part-gift — treated as a disposal of the gifted share at market value for CGT, with SDLT applying if a mortgage share is assumed. The Declaration of Trust should be updated to reflect the new ownership proportions.

Removing a Name

A departing co-owner is treated as disposing of their share at market value. CGT applies on any gain since acquisition. This applies equally where a spouse is removed from the title following a separation — though the no-gain, no-loss rule applies in the tax year of separation.

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Practical Considerations Before Acting

Consider a sale at arm's length rather than a gift. If the property has a substantial gain, a commercial sale at least provides the cash to pay the CGT liability. A gift provides no cash but still triggers the CGT. For some investors, this makes a commercial family sale more rational than a gift, particularly where the recipient has a lower marginal tax rate and could hold the asset with a higher base cost.

Obtain a professional valuation. For gifted transactions, HMRC may challenge the valuation used in the CGT computation. An independent RICS valuation at the date of transfer provides evidential support.

Update your wills. A property transfer changes your estate — both the transferor's and the recipient's. Both parties' wills should be reviewed after any major transfer.

Check the property country's formalities. Many countries require property transfers to be executed before a notary, registered with a land registry, and witnessed in specific ways. Informal transfers (e.g. a letter or email) are typically not legally effective for property.

For the broader IHT context, see our guide to inheritance tax on overseas property for UK expats. For planning ownership structures between co-owners, see our guide on joint tenants vs tenants in common. For succession planning across multiple jurisdictions, our estate planning guide covers the full picture.

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How Global Investments Can Help

Property transfers to family members require co-ordinated advice from both a UK tax adviser and a lawyer in the property country — and ideally both in conversation with each other before any documents are signed. The consequences of acting without advice — an unexpected CGT bill, a gift tax liability in the property country, or a structure that does not achieve the IHT outcome intended — can be difficult and expensive to reverse.

Global Investments works with qualified tax advisers and property lawyers across the international markets we operate in. We can facilitate introductions, co-ordinate cross-border advice, and ensure that any transfer is structured efficiently and documented correctly.

To discuss a property transfer or intergenerational planning, contact our team.

This guide is for general information only, as of June 2026. Tax rates, thresholds, and rules change regularly and vary significantly by country. Rules applying to trusts, gifts, and transfers are particularly complex and fact-specific. Always seek qualified legal and tax advice before acting. The value of investments can fall as well as rise; rules change; this guide does not constitute advice.