Helping son with mortgage - Capital gains tax?

Isatou

I have a small mortgage (£17k) left to pay on a house that my mother-in-law lives (we live in tied accomodation, so her house can be used for tax purposes as our main residence) The house is in joint names with my husband, although the mortage was only based on my income as he is self-employed and the business does not make a profit

I am now in the process of buying a house with my son, but as his job is not permanent, the mortgage, again, is based on my income alone, but he is named on the mortgage application. He will eventually (and hopefully!) buy me out when he has a pernament job. He will be living in the house (and possibly letting 1/2 rooms) but will be paying half the mortgage and other costs

What I would like to know is what is the CGT position if/when we sell. Although we will own 50% each once the purchase has gone through, what will happen when he buys me out, or buys back a percentage (say 10%) at a time?

Any help would be appreciated.

JoeK_3

Isatou wrote: »

I have a small mortgage (£17k) left to pay on a house that my mother-in-law lives (we live in tied accomodation, so her house can be used for tax purposes as our main residence) The house is in joint names with my husband, although the mortage was only based on my income as he is self-employed and the business does not make a profit

I am now in the process of buying a house with my son, but as his job is not permanent, the mortgage, again, is based on my income alone, but he is named on the mortgage application. He will eventually (and hopefully!) buy me out when he has a pernament job. He will be living in the house (and possibly letting 1/2 rooms) but will be paying half the mortgage and other costs

What I would like to know is what is the CGT position if/when we sell. Although we will own 50% each once the purchase has gone through, what will happen when he buys me out, or buys back a percentage (say 10%) at a time?

Any help would be appreciated.

You are allowed to make £8,800 capital gain in a tax year before you pay any capital gains tax on any excess. You could structure the sale in such a way as to negate having to pay any capital gains tax at all.

JoeK

Isatou

Thanks, but could you elarorate please! Speaking to friends, they say that I have 2 options: 1 - to transfer my share to my son as soon as the sale has gone through - and 2 - try to get the mortgage put in my son's name and me acting as guarantee. Also, is there an option to add my husband's name on the mortgage, so we would both be allowed to make £8,800 capital tax. I'm very confused as to what is the best option. Thanks