Capital Gains help!!

Tamalama

Hi all

I bought a house off my parents for £250k of which they gifted me a deposit of £65k.

I am now selling the house for £300k and want to return their deposit and repay the £185k mortgage.

If I had chosen to keep the £65k gifted deposit I would not have had to pay CGT on it but I'm guessing that giving it back is a different story.

Does anyone have any ideas how much CGT I will have to pay on the above and how I can avoid paying some?

I have about £20k worth of expenses to off set against the house.

My parents also took out a small mortgage to lend me £20k a few years ago. I pay this on their behalf, but could use some of the £65k to pay this off and then pay them directly instead of the bank? Could this off set some of the CGT?

Thanks, Hana

PS. I really need to get some kind of financial or tax advisor who can advise me on this and also investing money. I am clueless... Is there someone who can advise me on both?

tyllwyd

Have you ever lived in the house as your main residence?

Tamalama

No unfortunately!!!!!!!!!!!!

Jowo_2

Here's how you work out your CGT

http://www.hmrc.gov.uk/cgt/property/calc-cgt.htm

Jowo_2

Tamalama wrote: »

...

I have about £20k worth of expenses to off set against the house.

What expenses? Not everything can be offset. Here's an outline.

If you've spent extra money to buy, sell or improve your property, you can deduct certain costs. Costs you can deduct include:

• fees or commission for professional advice or services, eg Capital Gains Tax valuations, solicitors' and estate agent or advertising fees
• improvement costs to increase the value of the property - but not normal maintenance costs such as repairs or decorating
• Stamp Duty Land Tax and VAT (unless you can reclaim the VA

Tamalama

Thanks Jowo, I will look at this in more detail.

In answer to the question about what costs, that could potentially be a grey area in that case.

It covers complete refurbishment, new kitchens/bathroom/double glazing/carpets/electrics and....decorating. Perpahs I will have to break this £20k up?

If anyone knows the situation with the gifted deposit it woulld be much appreciated!