Capital Gains?

Capital Gains?

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To make it simple, will be referencing as person a b etc.

Person A gifted a property valued at 100k to person B. Before this happened person B gave 20k to pay off the outstanding mortgage.

Person A purchased it at 80k and so minus the capital allowance pays whatever rate (basic or higher) is applicable on the remainder? This would go in the CG pages of the SA?

What about person B, does he not get to right off the 20k as a bad debt or an expense?

The way I currently see it, only if person B loaned the amount he could deduct it from CGT if or when he sells in the future?

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By johngroganjga
22nd Apr 2015 19:26

I would say that B has purchased the property for £20k.

Market value substitution clearly applies for CGT, so B's base cost on any future sale is £100k.

The £20k B has paid is neither a bad debt nor an expense.

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By activelyreactive
24th Apr 2015 21:39

How can you write off the 20k as if it does not exist?

There must surely be an entry somewhere...

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