My dad has a second property, which he bought 25 years ago for £45,000. I have been living in this property for nine years and I have not paid him any rent. He has now given me permission to sell this house and use the proceeds to buy another house. The house is now worth £200,000. Basically, he has given me the house but it is still in his name. Will he be liable to pay tax on the whole profit (i.e., £155,000)? 

Arthur Weller replies:  

You should speak to a tax adviser about whether it is possible to write a ‘declaration of trust’ showing that nine years ago, he gave you the property and that all these past nine years you had beneficial ownership of the property. This could enable you to claim main residence relief from capital gains tax (CGT) when you now sell. See HMRC’s Capital Gains manual (at tinyurl.com/3wdncsyb) carefully (see also tinyurl.com/kahpcyh8). However, it will be necessary to consider the consequences of whether your father should have paid CGT nine years ago, depending on the value of the property then.