Capital Gains Tax Issue- buying a house at discounted rate

jacobar90

My fiance and I are buying a house from his parents that they are going to start building in the new year. They will sell it to us for £120k when it will be valued at between £160k - £170k. It will be built in the back garden of their B&B business which is not their primary private residence. It will be semi-detached, the other house will be sold on the open market.

Does anybody know if there are any capital gains tax issues with this?

I have contacted my local CAB office and they have sent me leaflets but they are really hard to decipher.

Will they have to pay capital gains tax?
Is their a way of avoiding it?
Does the fact that we are first-time buyers come into it?

Can anyone help?

Thanks

CLAPTON

You will have no tax liability..
you being a first time buyer has no bearing on their tax affairs.

They will have a tax liability based on the true market price of the property. However, it may be CGT but it might be deemed as trade if which case they will then be taxed under income tax rules