Any advice/pitfalls selling property below value to family

Edlegs11

Hi,
We bought a blighted property 5 years ago /unmortgageable due to proximity to mine entrance.Paid £26k cash.We did the property up & let it to brother in law.It owes us £38k.We are happy to sell it him for £40k.This is below market value we believe.Any minefields we may be walking into?Liabilities for tax etc?Any info gratefully accepted.

clutton_2

you need to talk to an accountant - you could be seen as trying to evade CGT

rizla01

IR cant know what work you have done to improve the prop. What would it be worth if no work had been carried out.

Bearing in mind how props in your area have risen over that period you should be able to sell it for near to that, or more, without any concern.

spunkeyrich

i think you would only be liable for the difference in the price you have paid into the property 38k and the price you sell it for 40k hence tax on 2k. but there is ways you could avoid it.

you sure the work done was only 12k or whas it a bit more? you sure you want to sell it to inlaw for 40k or a bit less? get what i mean?

rich

spunkeyrich

i think you would only be liable for the difference in the price you have paid into the property 38k and the price you sell it for 40k hence tax on 2k. but there is ways you could avoid it.

you sure the work done was only 12k or whas it a bit more? you sure you want to sell it to inlaw for 40k or a bit less? get what i mean?

rich