Concessionary purchase but without being liable for CGT?

yoshihirouk

Hello,

Situation:

Mother's house in need of renovation in order to sell up and move elsewhere
She is homeowner-mortgage free
She can't remortgage as she is on incapacity benefit
She can't raise money for repairs
Current value £100k approx
Improved value £130k approx

I would be prepared to buy the house for say £25k (minimum loan amount and enough to do works), renovate it, sell it and then use the money to buy her a new property elsewhere. Is it possible to do this without A) Her becoming liable for CGT for gifting me the equity
Me becoming liable for CGT upon the sale of the property after renovation

As far as I can tell, liabilities exist for both but I could be wrong.

Thanks :money:

poppysarah

Let's look at the figures

current house value £100k
Done up value £130k
Cost of doing up work £25k

profit = £5k But now she's possibly going to get done for depriving herself of assets.

Solic fees and overspend will gobble up any excess profit so why bother?

Let her sell it to a developer. A keen priced property will attract a couple of people who'll bid against each other and take the price over 100k if she's lucky.

Ian_Griffiths_Halifax

Can she get any of the improvements through www.warmfront.co.uk

yoshihirouk

poppysarah wrote: »

Let's look at the figures

current house value £100k
Done up value £130k
Cost of doing up work £25k

profit = £5k But now she's possibly going to get done for depriving herself of assets.

Solic fees and overspend will gobble up any excess profit so why bother?

Let her sell it to a developer. A keen priced property will attract a couple of people who'll bid against each other and take the price over 100k if she's lucky.

Clever thinking PoppySarah. I would imagine that the best course of action would be to actually get an EA around to give an estimate of before and afterworks values? If it is a lot of work and fees for £5k then why bother indeed (it's not always easy to see these things when you're so close to the project! :huh: )

Thanks

Ian - I'll have a look on there too. Thank you

UK007BullDog

Depending on your area and demographics it might be better to sell as it is as more people can get mortgages for £100K than for £130K.

Put it up for auction with a reserve price.

Why let your mom go through a renovation which is messy and the stress for her and for you is just not worth the extra small profit if any as you might not be able to sell for the price.

Beware the EA's, get more than one, they mostly overvalue.