There are tax consequences on the gift of property which have been summarized as below:
Capital Gains Tax
If the property is gifted to your Son, it will be considered as disposal for capital gains tax (CGT) purposes. Therefore, the person who is giving the property away could have CGT to pay even though he has received no money from the recipient.
If the property is the main residence i.e. the parents have always lived in that property, then any gain on the gift of the property will be covered by the Principal Private Residence (PPR) relief so there will be no CGT payable.
If the property is not your main residence and it has been gifted, it will be treated as sold at the Market value at the date of the transfer. Any gain on the transfer of the property will be taxable at 18% if you are a basic rate taxpayer, or at 28% if you are a higher rate taxpayer.
On the gift of your property to your son, there will be stamp duty payable by the receiver of the gift, but only if the property has a mortgage attached to it.
If there is a mortgage attached to the property, then Stamp Duty is payable on the outstanding value of mortgage.
When rental property is gifted to a person aged 18 or above, the rental income will also be transferred to the recipient and he will pay tax on it.
If the rental property has been gifted to a person under 18, the person who gifted the property is still taxed on the rental income, even if that income technically goes to the child.
A gift of property will be a Potentially Exempt Transfer (PET) for IHT purposes. This means there will be no immediate tax payable on it and no tax in future as long as the person giving away the gift lives for a further 7 years.