Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

New queries, issue 4536

02 February 2016
Issue: 4536 / Categories: Forum & Feedback

Keeping it in the family; Non-resident tax; Nearing retirement; Flat rate dilemma

Keeping it in the family

How can CGT liability be mitigated when selling a house to a relative?

Michael owns a house which he bought many years ago for £100 000. It now has a market value of £375 000. The house has been let for many years and is now empty. Michael plans to sell it to his nephew Paul at market value but Paul cannot obtain a mortgage for this amount so Michael has agreed that he can pay the purchase price over 25 years without interest ie Paul will pay Michael £15 000 each year (but he will have the option to pay additional amounts if he wishes to do so).

As Michael and Paul are connected persons it appears that the sale will result in an immediate upfront CGT liability of £77 000 (i.e. 28% x £275 000) for Michael...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon