CGT on residential property:lump sum + installments?
Discussion
I'm just trying to cover all my bases just in case we have to sell our main residence and wondering if anyone has done something similar to this plan.
We have a property which we intend to keep which if all the planned development goes well we will do very nicely out of. However new neighbours are moving in and for a time the price will go into free fall. But the new people have said they really want to move into our house and although they don't have enough money now if we would wait for them to sell their house, they would then pay us the cash plus we can live in it rent free for a year. However with this plan they are still k95 short.
I was wondering if it was possible to take the lump sum in the form of a deposit and then let them pay the rest in installments? The installments would be as a first charge against the property. My question is would the installments still be tax free or would it be classed as income? Yes I will talk to accountants and solicitors if it's a goer. TIA
We have a property which we intend to keep which if all the planned development goes well we will do very nicely out of. However new neighbours are moving in and for a time the price will go into free fall. But the new people have said they really want to move into our house and although they don't have enough money now if we would wait for them to sell their house, they would then pay us the cash plus we can live in it rent free for a year. However with this plan they are still k95 short.
I was wondering if it was possible to take the lump sum in the form of a deposit and then let them pay the rest in installments? The installments would be as a first charge against the property. My question is would the installments still be tax free or would it be classed as income? Yes I will talk to accountants and solicitors if it's a goer. TIA
You will be liable to Capital Gains Tax on the agreed sale price of the property. The tax is due to be paid 30 days after the sale . If you are willing to accept that the buyer pays you in installments rather than the full price up front, HMRC will still want the payment of the full CGT on the full agreed sale price.
Eric Mc said:
You will be liable to Capital Gains Tax on the agreed sale price of the property. The tax is due to be paid 30 days after the sale . If you are willing to accept that the buyer pays you in installments rather than the full price up front, HMRC will still want the payment of the full CGT on the full agreed sale price.
Thank you Eric. It's still a little early down here but I thought we'd get private residence relief as main home and only residence?Julia121 said:
Eric Mc said:
You will be liable to Capital Gains Tax on the agreed sale price of the property. The tax is due to be paid 30 days after the sale . If you are willing to accept that the buyer pays you in installments rather than the full price up front, HMRC will still want the payment of the full CGT on the full agreed sale price.
Thank you Eric. It's still a little early down here but I thought we'd get private residence relief as main home and only residence?Yep what I meant to write is would I be liable to pay any tax on the installment portion of the house sale? I'd like to think not because it is the sale money from my home however I have a feeling they may then zap me on income tax.
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