What are the Capital Gains Tax (CGT) Implications on Selling Bungalow?

Q. A couple of years ago I self-built a bungalow in my back garden intending to sell on the open market but since then my son and daughter in law have split up so I am now looking to sell the property to him but at a lower than market value. The bungalow cost overall £280,000 and is now valued at £520,000. My son can only afford to pay me £375,000. What are the capital gains tax (CGT) implications?

A: When you gift an asset to anyone, or when you transfer an asset to a connected person (e.g., a son – as in this case), for CGT purposes the asset is deemed to go across at present market value. The amount actually paid is ignored. Therefore, since the property is currently worth £520,000, and it cost £280,000, there is a capital gain of £240,000. However, there may be a value to allocate for the actual land underneath the property being transferred which may be included in the calculation.

Disclaimer

Powered by BetterDocs

Feeling Lost with Finances?
We're Here to Help!

Tax filings
0 +
Accounts filings
0 +
Reviews
0

Request A Callback

Call Now