Selling property to a friend privately, the pitfalls + query capital gains tax

1.Hi, my query is twofold. I have a property that I am selling, a trusted friend of mine has made me an offer and I have accepted it in principal subject to discussion with my solicitor. However, I am having a meeting with this friend soon to see what way they want to arrange the purchase - any advice on the pitfalls of selling to someone you know??

2.I am also wondering if anyone knows how long do you have after selling a property before capital gains tax would be looked for if you are not investing in another property straight away?

Thanks!

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

Is it your PPR that you're selling?

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

Hi, yep it is.....

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

Then no CGT to worry about! Providing it was always your sole or main residence.

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

ah well sorry I forgot to say no this would be my third residence, the first one on my own, but I dont think that applies.....

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

So it's an investment property that you're selling, not your principal private residence (PPR)?

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

irishkiwi197 said:

1.Hi, my query is twofold. I have a property that I am selling, a trusted friend of mine has made me an offer and I have accepted it in principal subject to discussion with my solicitor. However, I am having a meeting with this friend soon to see what way they want to arrange the purchase - any advice on the pitfalls of selling to someone you know??

Click to expand...

I can't see any pitfalls as long as you make it clear that it's a business transaction which will be dealt with by your respective solicitors. However, if for some reason you decide not to sell, or your friend doesn't cough up the money, then I suppose the friendship is in jeopardy! On the plus side you save on advertising and estate agents fees.

irishkiwi said:

2.I am also wondering if anyone knows how long do you have after selling a property before capital gains tax would be looked for if you are not investing in another property straight away?

Click to expand...

If it's your PPR then there is no capital gains tax liability. Perhaps you're confusing this with stamp duty clawback?? If so the position is as follows: if you were exempt from stamp duty as a first time buyer, there is a stamp duty clawback, at investors' rate, if you rent the property before you've owned it for 5 years. This does not apply to the sale of the property. Therefore you have no tax liability on the sale of your principal private residence. Good luck.

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

Hi all thanks for your messages, just to point out, and im not going into any great detail here but - I had previously bought and sold two properties with my then partner, we broke up and I bought this property in question on my own so no it was not rented and yes I was living there as my principal residence.....have had the property in question for almost 2 years.....

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

irishkiwi197 said:

I bought this property in question on my own so no it was not rented and yes I was living there as my principal residence.....have had the property in question for almost 2 years.....

Click to expand...

You will be exempt to CGT on the disposal of your PPR so long as it's always been your main or sole residence.

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

I'll really have to start typing faster, or stop having a cuppa while typing!!

This thread totally changed and then changed back again while I was thinking of a reply. Must be getting slow in my old age! Sorry tenacious, posts crossed.

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

I appreciate your reply temacious, could you clarify: "your main or sole residence"?? as i indicated i had owned two other properties along with a partner over the years, but this latest one I bought alone.....

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

Your main or sole residence is the house you live in most of the time, ie your private home. You can only have one PPR, the house where you reside.

Re: Selling property to a friend privately, the pitfalls?? + query capital gains tax

ok I just thought that you were asking did I have his property from years ago and am living back in it again or something. well I liteweight there must be something in the air cause im not keeping up with my own conversation obviously!!! tanks a tousand peoples!