CGT on a Vendors Gifted

amjad171

Hello,

I'm wondering if someone can help with a query I have regarding CGT on a Vendors gifted.

I agreed a fee of 103k with a buyer on a property I bought for 80k 16months ago. I got a call from her mortgage broker last week saying the valuation is going to be done and on the form he is going to be putting the value of the property at 115k.

I had already spoken to my accountant and knew what my CGT amount would be for selling at 103k.

Now I get a call from the broker today saying he wants me to do a vendors gifted and gift the buyer 12k as the valuation has come back at 115k, meaning i get the 103k agreed with the seller. I said to him this doesn't sound right to me and I will be speaking to my accountant about this and my CGT. The broker has said on a gifted deposit you don't pay CGT.

Can someone tell me if he is telling the truth and whether on a vendors gifted you do pay CGT?

LillyJ

amjad171 wrote: »

Hello,

I'm wondering if someone can help with a query I have regarding CGT on a Vendors gifted.

I agreed a fee of 103k with a buyer on a property I bought for 80k 16months ago. I got a call from her mortgage broker last week saying the valuation is going to be done and on the form he is going to be putting the value of the property at 115k.

I had already spoken to my accountant and knew what my CGT amount would be for selling at 103k.

Now I get a call from the broker today saying he wants me to do a vendors gifted and gift the buyer 12k as the valuation has come back at 115k, meaning i get the 103k agreed with the seller. I said to him this doesn't sound right to me and I will be speaking to my accountant about this and my CGT. The broker has said on a gifted deposit you don't pay CGT.

Can someone tell me if he is telling the truth and whether on a vendors gifted you do pay CGT?

Seems a bit of a coincidence that the "extra" value nicely adds up to just under 10%, leading to her being able to get a mortgage!!:rolleyes:

I would go back and say "if it's worth 115k then that's what I'll sell it for!" It's funny cos I thought that valuers never valued at higher than the offer price, so it seems dodgy to me, they must have told the mortgage people that the offer accepted was 115k.

amjad171

he did put 115k down on the form, and the thinking behind that was if they value it lower than 115k there is a small chance they will value it less than 103k. Maybe I was being naive. But something just doesn't sound right.

Back to the question in hand, If I agreed to this would I be liable fo CGT on the 12k I would never see?

silvercar

Back to the question in hand, If I agreed to this would I be liable fo CGT on the 12k I would never see?

You should be OK, if necessary the 12k would be recorded as costs necessary for the sale of the property, so still come off the bottom line.

To make sure I would put a thread on the tax board, some ex tax inspectors hang out there.

Seems odd that a property could legitimately be valued at £115k when you are accepting 103k.

amjad171

I though 103k is a good price considering thats a profit of 20k plus in just over 15months, that was before the valuation. I do need the money for other thing, but now I am thinking should I be asking for more.

Thanks for your help though, I will post on the tax board