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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 7200
Experience:  FCCA FCMA CGMA ACIS
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I need an expert about HMRC tax advice on buying and selling

Customer Question

I need an expert about HMRC tax advice on buying and selling property to a friend. I have a close friend who wants cash desparately and have asked me to buy his home off him at 10% below market rate. He may buy it back off me once he can afford to pay me back.
JA: For which tax year do you need advice?
Customer: the most recent and for future. Because I am looking to buy this house in next 2 months and may resell back to him possibly in few months time. Are there any potential legal / HMRC tax issues I need to becareful of? will it be illegal to sell it back to him at the same price in a few months time?
JA: Anything else you want the Accountant to know before I connect you?
Customer: just want to see if there are any potentila illegal activites from HMRC or law perspective?
Submitted: 9 days ago.
Category: Tax
Expert:  Nicola-mod replied 9 days ago.
Hello,
I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.
I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
Thank you!
Nicola
Expert:  bigduckontax replied 9 days ago.

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

There are two taxes to consider here, Income Tax (IT) and Capital Gains Tax (CGT). What you are doing is effectively making your friend a loan. That and its repayment are outside the scope of IT unless interest in involved in the repayment. However, when the property is oeventually restored to your friend you will be liable for CGT on the notional gain made on the transaction less your non-cumulative Annual Exempt Amount, currently 12K.