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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4996
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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My brother is about to sell his house and 25 years ago I lent

Resolved Question:

My brother is about to sell his house and 25 years ago I lent him 9k to do so - now he is about to give me 30k when he sells. now I know youre allowed 11k capital gains tax allowance in 1 tax year. The point is this; In the current tax year I have actually earnt nothing, beacause I was looking after my stepfather and received no money for doing this. can I therefore assume that the other10k profit is also non-taxable as I can offlay against my personal tax allowance, or is this not the case?
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

If you had agreed with your brother that the loan would be repaid in two forms, namely:
- accrued interest at prevailing rate, and
- share of profit on capital gain

Then you could show interest as un earned income and avail your personal allowance against it when paid and also use gains allowance to cover share of profit/gain on sale of property.

In the absence of such agreement, this gain would be chargeable to capital gains as a return on original investment, I'm afraid.

I hope this is helpful and answers your question.

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