They don't call it Stamp Duty in Scotland, it's Land and Buildings Transaction Tax, but in either case 

• "Abusive Tax Avoidance": Note that if the entire purpose of your child buying a property is purely to avoid paying stamp duty (or LBTT in Scotland), this could be considered an "abusive tax avoidance arrangement".

Your friend is concerned about gift tax when the money comes back to him, but not when the house is given to the child in the first place?  My first question, though, would be if the child is married or ever plans to be.  And if so, who gets the house in the divorce?