Hello and welcome to the site. Thank you for your question.
You have clarified the position as far as inheritance tax implications are concerned.
If you father was to sell the property to you at below market value, HMRC would regard the sale to have taken place at market value because it is to a connected person.
As it is your father's main residence, any gain arising from sale of it to you would be covered by private residence relief and therefore no CGT payable.
The sum of £38k gifted to you would be treated as a potentially exempt transfer for IHT purposes and the seven year rule would apply.. if he was to survive for 7 years after making the gift, then the gifted amount is outside the scope of IHT. As you have stated in your introduction, his assets are below the threshold of IHT (£325k).
You as a recipient of the gift would receive it tax free as there is no tax on gifts in the UK.
I hope this is helpful and answers your question.
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