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First mortgage, with a tax-free gift, capital gains tax
Tom-firsttimebuyer
Posts: 3 Newbie
Hi,
I'm in the lucky position of having my parents give me a property. It is a rental property that my mum bought 3 years ago with a mortagage of £80,000and an £18,000 deposit; hence, the sale value of the house was £98,000.
My mum now plans to sell me the property at a value of £105,000 although its current market value is something like £165,000. As part of my arranged mortgage the £18,000 deposit my mum had in the property is being gifted to me as a potentially exempt transfer...lucky me, I know!
Obviously my mum will be liable to pay capital gains (CGT) on the property sale and I know that the CGT should be paid on the market value increase which is a round £60,000.
Is there any way to avoid this? Can my mum pay only CGT on the value she sells it to me at or is there a way to class the whole transfer as a potentialy exempt gift rather than just the deposit?
Any info greatfully received,
Tom - soon to be home owner
I'm in the lucky position of having my parents give me a property. It is a rental property that my mum bought 3 years ago with a mortagage of £80,000and an £18,000 deposit; hence, the sale value of the house was £98,000.
My mum now plans to sell me the property at a value of £105,000 although its current market value is something like £165,000. As part of my arranged mortgage the £18,000 deposit my mum had in the property is being gifted to me as a potentially exempt transfer...lucky me, I know!
Obviously my mum will be liable to pay capital gains (CGT) on the property sale and I know that the CGT should be paid on the market value increase which is a round £60,000.
Is there any way to avoid this? Can my mum pay only CGT on the value she sells it to me at or is there a way to class the whole transfer as a potentialy exempt gift rather than just the deposit?
Any info greatfully received,
Tom - soon to be home owner
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