I would like to sell a house that I have owned since 2013 and have lived in for two years. It was put on a permission to let for three years but was not let, and then since 2018 partially lived in for work purposes on and off. My parents have resided in the property throughout the period I have owned it. I would like to sell the property to them for the value of the remaining mortgage. What are the capital gains tax (CGT) implications of this? I am a higher rate taxpayer, and to possibly complicate things a little my parents loaned me the deposit for the house so it would be repayable if sold – but will that be deducted from the CGT if I am selling to them? 

Arthur Weller replies:  

Since you are selling to your parents, who are 'connected persons' for CGT purposes, your selling price is deemed to be the present market value of the property, and the actual amount your parents pay you is ignored. You will get principal private residence relief for the two years you lived in the property, and possibly also for the other times you lived there on and off (I don't know the details, so I can't say for certain). The last nine months of ownership will also be exempt from CGT due to the 'final period exemption'. And when the CGT computation is completed, you can reduce the capital gain by the CGT annual exemption (assuming you have not used it elsewhere in the tax year).