How much can my parents gift me for a UK house deposit tax-free?

Any amount - there is no UK gift tax. However, IHT 7-year rule applies: if the donor dies within 7 years and their estate exceeds £325,000, the gift counts against their IHT nil-rate band on a tapered scale. For donors with estates well below £325k, gifts of any size have zero IHT effect. The £3,000/year annual gifting exemption is available for ongoing small gifts (PETs) - useful for separating small recurring gifts from larger one-off help.

Will my parents pay stamp duty if they help me buy?

It depends on the structure. Gifted deposit: parents pay no stamp duty (they're not buying the property). Joint mortgage with parents on the deeds: the 5% additional-rate SDLT surcharge applies if they already own a home - £15,000 extra on a £300k property. JBSP (Joint Borrower Sole Proprietor): parents commit income to the mortgage but are not on the deeds, so no surcharge applies. Most families now use JBSP rather than full joint mortgages for this reason.

Do I need a gift letter for my parents' deposit help?

Yes, your mortgage lender requires it. The gift letter must confirm: (1) the amount; (2) the relationship; (3) that it's a gift not a loan; (4) that the donor has no interest in the property; (5) signed by the donor. Without this, the lender treats the gift as a loan, which reduces your borrowing capacity. Most lenders have a standard gift letter template; your solicitor can also draft one.

Buying a home with parents’ help - UK 2026/27

Last reviewed by the UK Tax Drag editorial team · 12 May 2026 · How we review · Next review due 12 November 2026 · See what changed · Report an error

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What you need to know: Buying a home with parents’ help - UK 2026/27

Quick answer: For UK parental home-buying help in 2026/27: gifted deposits are the most common (~80% of cases) - typically £20,000-£80,000, IHT-exempt if donor survives 7 years. Joint mortgages with parents add their income to the application but make them legally liable. Joint Borrower Sole Proprietor (JBSP) mortgages let parents borrow without being on…

Key points:

Joint Borrower Sole Proprietor : parents commit their income to the mortgage but are NOT on the deeds
The property is solely owned by the buyer
No additional-rate stamp duty surcharge applies (parents aren’t buying the property)

For UK parental home-buying help in 2026/27: gifted deposits are the most common (~80% of cases) - typically £20,000-£80,000, IHT-exempt if donor survives 7 years. Joint mortgages with parents add their income to the application but make them legally liable. Joint Borrower Sole Proprietor (JBSP) mortgages let parents borrow without being on the deeds - avoiding the 5% stamp duty surcharge. Guarantor mortgages use parental savings or property as security. Family-assisted FTB schemes include Barclays Family Springboard and similar. Document everything via Deed of Gift to avoid HMRC questions.

The five main forms of parental help

Method	How it works	Best for
Gifted deposit	Parents transfer cash to child; child uses as deposit	Parents with cash to spare; clear intent to gift not loan
Loaned deposit	Parents loan deposit to child; child repays	Parents who need eventual return; need formal documentation
Joint mortgage	Parents and child on mortgage AND deeds	Maximises borrowing but exposes parents to stamp duty surcharge and CGT on disposal
JBSP (Joint Borrower Sole Proprietor)	Parents on mortgage but NOT deeds; child owns 100%	Avoids parental stamp duty surcharge; popular with families
Guarantor mortgage	Parents provide savings or property as security; not on mortgage	Parents who want to help without ongoing liability

Gifted deposit - the most common path

A gifted deposit is cash transferred from parent (or other family member) to the buyer, with no expectation of repayment. The buyer uses the gift as part of their deposit.

The mortgage lender requirementLenders require a written gift letter confirming: (1) the amount of the gift; (2) the relationship of the donor to the buyer; (3) confirmation it is a GIFT not a LOAN; (4) confirmation the donor has no interest in the property; (5) the donor’s signature. Without this letter, the lender may treat the gift as a loan and reduce the buyer’s borrowing capacity.

The IHT 7-year ruleA gifted deposit is a "Potentially Exempt Transfer" (PET) for IHT purposes. If the donor dies within 7 years of making the gift, the gift counts against their IHT nil-rate band on a sliding "taper" scale (100% chargeable for 0-3 years, then tapering down to 20% in years 6-7). For donors with estates above £325k, this matters. For donors well under that threshold, no IHT effect at all.

Joint mortgage vs JBSP - the stamp duty issue

If a parent is on the deeds, the property is technically their "additional dwelling" (if they already own a home) - triggering the 5% additional-rate Stamp Duty Land Tax surcharge. On a £300,000 property, that’s £15,000 of extra tax.

JBSP solves this:

Joint Borrower Sole Proprietor: parents commit their income to the mortgage but are NOT on the deeds
The property is solely owned by the buyer
No additional-rate stamp duty surcharge applies (parents aren’t buying the property)
Parents bear the mortgage liability if the buyer defaults

JBSP mortgages are available from many UK lenders (Halifax, Santander, Nationwide, Skipton, Barclays, several specialist lenders). Different lenders set different rules - some allow up to 4 joint borrowers; some specifically target parental support.

Worked example: gifted deposit + first-time buyer SDLT

Tom (28) buys £320,000 flat with £40,000 deposit (£25k his savings, £15k parental gift)

Property: £320,000
Deposit: £40,000 (12.5%)
Mortgage: £280,000 at 4.5% / 30 years = £1,418/month
SDLT (first-time buyer, under £425k threshold): £0
Parents’ £15k gift IHT impact: zero (well under their unused NRB)
Documentation required: signed gift letter from parents, bank statements showing transfer

Tom owns the flat outright. His parents have no legal interest. The £15k gift starts the 7-year IHT clock; if both parents are alive 7 years later, the gift falls outside the IHT estate entirely.

What to formalise

For gifted deposits(1) Signed gift letter for the lender. (2) Optional but recommended: Deed of Gift (~£200 solicitor fee) creating clear legal record. (3) Email trail showing transfer history. (4) Both parents sign if jointly funding.

For loaned deposits(1) Loan agreement specifying amount, repayment terms, interest (if any), what happens on death/disability. (2) Solicitor-drafted is best (~£300-£500). (3) The buyer’s lender will probably treat this as a debt reducing borrowing capacity - factor into application.

For joint mortgages or JBSP(1) The mortgage documentation handles primary obligations. (2) Optional: side agreement between family members documenting ownership intentions, what happens if the buyer wants to sell, what happens if parents need funds back. (3) For JBSP: deeds clearly show buyer as sole proprietor.

Common parental-help mistakes

Mistake 1: No gift letter for the lender.Lender requires written confirmation. Without it, gift treated as loan, borrowing capacity reduced.

Mistake 2: Parent on deeds when they already own a home.Triggers 5% additional-rate SDLT. Use JBSP instead.

Mistake 3: Ignoring IHT 7-year rule on substantial gifts.£50k+ gifts from parents with estates above £325k may face IHT taper if donor dies within 7 years. Insurance (term life cover for 7 years) can mitigate.

Mistake 4: No documentation of intent.If parents loan rather than gift, the lender may discover this years later (e.g. when probate occurs) and treat it as having reduced borrowing capacity. Document properly.

Mistake 5: Failure to plan for relationship breakdown.If the buyer is unmarried and lives with a partner, the partner may acquire interest in the property over time (Trusts of Land Act 1996). Parents should consider whether documentation protects the family contribution.

Estimate the mortgage you can afford

The mortgage calculator shows monthly repayments at different deposit sizes - useful for evaluating how parental help changes the monthly cost.

Open the mortgage calculator

Sources and references

UK FTB statistics from Halifax First-Time Buyer Review 2025. SDLT additional-rate surcharge from gov.uk SDLT. IHT 7-year rule from gov.uk IHT gifts. JBSP guidance from major UK lenders.

UK Tax Drag is educational and not regulated financial, tax, legal or family advice - see the disclaimer for the full position. For decisions with material legal or family consequences (divorce, probate, separation), specialist advice from a solicitor and/or financial adviser is strongly recommended.

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