Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello, I'm Keith and happy to help you with your question.
The property is in his name and he will be liable for Capital Gains Tax (CGT) on the 35K gain. The gain is calculated by taking the acquisition price plus the costs plus any enhancements eg new kitchen, installation of central heating, double glazing etc to arrive at a buying price. take the sale price less selling costs and the difference is the gain for CGT purposes. This is taxed at 18% or 28% or a combination of the two rates depending on his income plus the gain in the year of sale. From this gain can be deducted his Annual Exempt Allowance of 11K. From the figures quoted the worst case scenario is a CGT bill for him, not you, of 35K - 11K = 24K @ 28%, a tad under 7K tax.
Sorry to have to bring the news you perhaps did not want to hear, but that is the reality of the situation in tax terms. No tax liability devolves upon you personally.