Hello,
Not sure if this is right department for my question.
One of my tenants have expressed interest in buying a property from us. I am considering best approach to it, having spoken to their mortgage broker- there's a option of gifting them 5% equity for a deposit and no own cash required from them to buy. Another option is for them to provide 5% deposit, then use my 5% discount to achieve 10% equity deposit.
Purchase price would be £130000, which is in line with local valuations.
My question is simple:
1. If I declare sale price at £130k, then gift tenants 5% equity(£6500) leaving them with £123500 mortgage, will I be liable to pay 18%/24% CGT on £6500 I am giving away to them? Or is there a way of doing it without exposing myself to yet another tax?
2. I think that another option for this to avoid any CGT on gifted equity would be to discount sale price to £123500, then for tenants to provide 5% deosit leaving them with £117325 mortgage? Any other solutions that please?
Many thanks
Andre
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