Answered by Mawlana Ilyas Patel
In the UK, if someone was to gift away a house to someone else, then if they pass away within seven years, this gift still falls under inheritance tax. Longer if the person remains living in the house.
The question therefore is, can a gift of a house be done in front of witnesses, accepted by the one being gifted, and then not changing the deed to the house? The recipient of the gift could grant the person who made the gift the right to act as an agent on their behalf so that all sales of the house can still be completed if required.
The only reason the deed has not been changed is that under UK law, this would still be taxed upon death but not taxed if left in the original person’s name.
In the Name of Allah, the Most Merciful and Compassionate
Yes, the gifting of a house can be done to someone without changing the title deeds to the house, as long as full possession of the house is given, and ideally in front of two witnesses.
Possession is a Condition in Gift-Giving
Gift-giving (hiba) is a means of transfer of ownership, and it is complete when possession is transferred. [Maydani, Al-Lubab Fi Sharh al-Kitab]
How Can Full Possession Take Place when One Still Has One’s Belongings Inside
One of the ways of completing a gift-giving with possession is one sells the property with an agreed small amount, say, £50, then when gifting, one excludes the belongings one has in the house. This way, the house will now belong and transfer to the recipient, and the belongings will remain for the person who gives the gift.
For example, I am selling you the house for £50 except for my belongings. One can absolve the person the £50, too, after that if he wants.
Another way is to give the belongings – that one has in the house – to the recipient as a deposit and trust for safekeeping, then gift the house with full possession. For example, I am keeping my belongings inside this house as a trust with you and gifted you the house as a gift. [Fatawa al-Hindiyya; Ibn ‘Abidin, Radd al-Muhtar; Rada al-Haqq, Fatawa Darul-Ulum Zakariyya]
It would be good to sign and do the above gifting in front of two witnesses.
The above is based on the fiqh of Hanafi law. As for the transfer of ownership according to the law of the land, this is something that you will have to decide and agree on mutually, again in front of two witnesses, to avoid any dispute and misunderstanding in the future.
ولَوْوهَبَدارًافِيهامَتاعُالواهِبِ وسَلَّمَ الدّارَ إلَيْهِ أوْ سَلَّمَها مَعَ المَتاعِ لَمْ تَصِحَّ والحِيلَةُ فِيهِ أنْ يُودِعَ المَتاعَ أوَّلًا عِنْدَ المَوْهُوبِ لَهُ ويُخَلِّيَ بَيْنَهُ وبَيْنَهُ ثُمَّ يُسَلِّمَ الدّارَ إلَيْهِ فَتَصِحُّ الهِبَةُ فِيها
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I pray this helps with your question.
[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani
Mawlana Ilyas Patel is a traditionally-trained scholar who has studied within UK, India, Pakistan, Syria, Jordan and Turkey.
He started his early education in UK. He went onto complete hifz of Qur’an in India, then enrolled into an Islamic seminary in UK where he studied the secular and Alimiyyah sciences. He then travelled to Karachi, Pakistan.
He has been an Imam in Rep of Ireland for a number of years. He has taught hifz of the Qur’an, Tajwid, Fiqh and many other Islamic sciences to both children and adults onsite and online extensively in UK and Ireland. He was teaching at a local Islamic seminary for 12 years in the UK where he was a librarian and a teacher of Islamic sciences.
He currently resides in UK with his wife. His personal interest is love of books and gardening.