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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4090
Experience:  FCCA FCMA CGMA ACIS
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I borrowed £60,000 from my parents to help me buy a house in

Customer Question

I borrowed £60,000 from my parents to help me buy a house in 2001 with a peppercorn rent. I have paid them back. I have now sold the house but didn't live there for the last year. Does the £60,000 come off my capital gains tax
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
Forget about loans, they are irrelevant in Capital Gains Tax (CGT) computations. Many people do not realise that whenever they dispose of landed property there is a latent exposure to CGT, but for vast majority the majority PRR applies (see below).
On the assumption that you occupied the house as your sole or main domestic residence Private Residence Relief (PRR) will apply and this relieves CGT by 100%. There is no CGT liability as the last 18 months of ownership are ignored in the CGT calculation; you are deemed to occupy and PRR is extended, even if you are not resident.
I do hope I have set your mind at rest on this matter.