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BTL sold to Son


I have a client who owns a BTL flat and has a BTL mortgage on it for £177k. This was the price he purchased the flat for

The term is about to finish and he is unable to get another mortgage due to his credit rating.

He was thinking of letting his Son buy the flat  for £177k. The property is valued at £300k max.

No gain is realised for the Father.

What are the tax implications for the Father [original owner of the flat]?

Because no gain is realised i cannot see any problem. Are my assumptions correct.




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06th Dec 2012 12:08

For CGT purposes.

..the father will be deemed to have disposed of the property for market value - ie for £300,000 so he will make a chargeable gain of £123,000.

Market value applies because the transaction would not be at arm's length so s17(1)(a) TCGA would apply.

Thanks (1)
06th Dec 2012 12:14


The CGT is dealt with above.

Stamp duty will be on the price paid, not the market price. 

Thanks (1)
By ACDWebb
06th Dec 2012 12:22

CGT as above

Stamp Duty look at

SDLTM00330A Example 2

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