New queries, issue 4669

Hand out

CGT on contribution to property purchase.

A client wishes to provide £200 000 to help his son buy a property for £500 000. There will be no mortgage and it will be the son’s only residence and he will live there alone. A declaration of trust is to be put in place stating that on any sale my client will receive the sum of £200 000 or two-fifths of the net proceeds of sale whichever is the greater.

I believe the son’s share will be covered by only or main residence relief for capital gains tax but if the father gets back the £200 000I presume there is no tax consequence. However if he receives any more will he be liable to capital gains tax on the gain in value that he receives back?

If the father dies is it the...