Selling at below market value to my son

Always_the_realist

Fingers crossed someone has a definitive answer.  Be really grateful. 
I bought a house at auction 6 months ago for 160k. Spent £20k on renovation work. (All my savings)  I want to sell the house to my son for £180k. I will not be making any gain. The house will have a market value of approx £200k. He is able to get a mortgage of 149k. He has a deposit of 25k which leaves him £6k short. 2 questions. The house is realistically valued at 200k. As the LTV will now be different will the lender increase his mortgage?  If we inform the lender the house is valued at 200k but I’m willing to accept 180k (bearing in mind the work he has done himself free of charge, will I be subject to any tax implications?  I have very little income personally, £500 a month (live off my savings) Full capital gains allowance. Thank you in advance 

lisyloo

No judgement here, but consider the following

How has the LTV changed?. The V-value hasn't changed just because you pretend it has.

I think you'll have to pay CGT on the full amount (the allowance is only £6K from april). You can sell it to your son for whatever you like, but you can't evade CGT. (I am assuming this isn't your home).

How old are you and do you have savings for long term care or are you expecting the state to cover that? 

TheJP

Where will you live after you have sold your house? 

Always_the_realist

I have savings as I worked very hard and wanted to retire early. I’ll sell the house to my son for the cost of the property plus renovation costs which are less than I thought, so I’ll sell to him for 174000. I’m not making any gain. I work part time. I’ll have a private pension to take in 18 months at 60. I’m currently living off my savings.  I won’t be relying on anyone. I have my own house. 

lisyloo

You will have to pay CGT based on the market rate IF this is NOT your home
Capital Gains Tax: what you pay it on, rates and allowances: Market value - GOV.UK (www.gov.uk)

I don't think it will be that large.

You probably won't have a short or medium term issue with care.

Typhoon2000

For Capital gains purposes you will have to declare the current value rather than the sale prices as this is sale to a connected person. However you can also deduct your capital expenses and purchase costs when working if there is any gain. So with the £20k renovation costs there appears to be a small capital gain before allowances.