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I want to sell my mum’s house for below market value to my common-law partner – what would be his tax position?
I have power of attorney for my mum's affairs as she is in a care home. Can I sell her house in Manchester for less than market value to my partner (who I am not married to)? I know he will be liable for stamp duty land tax (SDLT), etc. Are there any other tax pitfalls? 
 
Arthur Weller replies: 
I cannot answer your question from the legal perspective. But from a tax perspective, yes you can do as you have written. SDLT will be based on the amount actually paid. In respect of capital gains tax (CGT), see pages www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg14530 until cg14547. You can see that quite likely HMRC will substitute 'market value' for the amount actually paid. This may be to your advantage. If principal private residence relief is available to your mother, this will mean that your mother pays little or no CGT. Furthermore, your partner's assumed cost of acquisition, for future CGT consideration, will be today's market value of the property, not the amount actually paid. 

This question was first printed in Tax Insider in July 2018.

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