Buying a property from my Father

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    Buying a property from my Father

    Hi guys,

    My dad is selling his buy to let property and it just so happens that I am also looking to expand my portfolio so we have agreed a price at the current market value.

    Could anyone please advise if there is a more tax efficient way to do the transaction rather than just the usual method that may incur SDLT for me and CGT for him?

    I’ve read about gifts or inheritance but not sure if this would be applicable?

    The agreed price is £90k and I would be looking to purchase in my limited company.

    My dad currently owns the the property in his personal name and has a £40,000 mortgage on.

    Any advice would be greatly appreciated.

    Dad ( seller ) is liable for CGT after sale of the property?. What is the approx capital gain ? Does he pay 18% or 28% ?

    Ltd Company ( Buyer ) pays 3% sdlt on the sale price.

    Does Dad want to gift away £50K of his money to your company ? I think it is not sensible to give away money to a company.


      Whatever value is agreed between you, the transaction is treated for tax purposes as happening at market values.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).



        Dad bought the property for £63k and is selling for £90k.
        He only works part time as he is semi retired so I would expect 18%?

        can I ask how it would work with him gifting 50k to my company?

        thank you for your assistance


          1. Your Dad's capital gain is £90K ( sale proceeds) - £63K ( original cost ) = £27K .

          The capital gains tax = £27K - £12.5K ( Personal allowance ) = £14.5K at 18% = £2610

          This cgt applies for disposal by sale or by gifting .

          2. For disposal by gifting, the sdlt is charged on the " sale consideration" which is the "outstanding mortgage loan".

          If the consideration is below £40K , sdlt is not charged for purchase by persons but this may not apply to purchase by a company


            The website :


            shows this :

            Companies must pay the higher rates for any residential property they buy if the:
            • property is £40,000 or more
            • interest they buy is not subject to a lease which has more than 21 years left

            If the property costs more than £500,000, the 15% higher threshold SDLT rate for corporate bodies may apply instead.


              thanks Gordon.

              So if my father made an overpayment of £1 on his mortgage then there wouldn’t be a SDLT charge if I went down the disposal by gifting route?

              thanks again


                Its something to clarify with a conveyancing solicitor before you decide to proceed . I am not qualified to give tax advice.


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