I own a freehold property and have let the mother and

The gift to your daughter is a disposal by you for Capital Gains Tax (CGT) purposes and you will be liable for that tax on any gain made. The gain can be computed by taking the net sale valuation less the purchase price, plus costs and any improvements (eg installation of central heating, double glazing, extensions. the resulting balance is the gain which will be taxed (less your Annual Exempt Allowance of 11K) at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of transfer. As you are not retaining possession the gifts with reservation rules do not come into play.

If you wait until you die and bequeath it to her than your entire estate, including both houses, will be aggregated together along with everything else and be liable to Inheritance tax (IT). IT kicks in at 325K, plus any charitable and certain other bequests plus inter spousal transfers. The outstanding balance is charged at 40%, flat rate. If you gift to your daughter you create a Potentially Exempt Transfer (PET) in your IT account. PETs run off at a taper over 7 years and in the event of your demise within that time will be added back to your estate for IT purposes. If your estate is insufficient to meet the tax on the PET then that liability cascades down to the beneficiary for immediate payment. The classic protection is a reducing term life insurance policy.