Avoiding CGT?

[MrShed]

This is probably going to be a really stupid question but here goes:

My parents have owned a flat for around 8 years, purely for BTL purposes. It has risen in value over that period from around £30k to around £90k.

My question is this: is it not technically possible to avoid the CGT this would lead to by...my parents "selling" the property to me for a nominal fee(say £1), and me living there for a couple of months, after which I would sell the property and give the money back to my parents? Or is it possible to do this if the property was gifted to me? Would I even have to live there a couple of months?

Probably totally not possible, just thought I would see the opinion on it - I know nothing about tax and CGT!!

[Taxation Solutions]

Mr Shed

As a connected person you will be deemed to acquire your parents BTL property at open market value i.e. £90K.

They will pay CGT on a deemed gain of £60K

Unfortunately what you are suggesting will not work.

www.propertytaxation.co.uk

[MrShed]

Yes I figured it was far too obvious a potential loophole to work. Thanks for the reply!

[sober]

Hi

To avoid the CGT as I understand from well informed posts by Ramnik and others, that if your parents were to move into the flat and live there for a year or so (or even less) then they get the benifit of PPR relief of at least 3 years and lettings relief as well - thereby reducing the potential CGT

Alternatively, if your parents moved abroad (and became non resident in the uk)and then sell the house - and have no plans on becoming resident in UK for 5 years then the CGT can be saved entirely.

Perhaps you can search through the past postings

Good luck

[Tax Accountant]

Hi

To avoid the CGT as I understand from well informed posts by Ramnik and others, that if your parents were to move into the flat and live there for a year or so (or even less) then they get the benifit of PPR relief of at least 3 years and lettings relief as well - thereby reducing the potential CGT

Alternatively, if your parents moved abroad (and became non resident in the uk)and then sell the house - and have no plans on becoming resident in UK for 5 years then the CGT can be saved entirely.

Perhaps you can search through the past postings

Good luck

Sober, you are spot on.

Ramnik