Paying a seller £220k now and the remaining £20k when the property is resold.

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Paying a seller £220k now and the remaining £20k when the property is resold.

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I'm purchasing a property for £240k which I intend to resell in 6 months time. I am paying the seller £220k now and the remaining £20k when I resell the property.

The question I have is - does IR see the £20k as a cost in the transaction and deductible for CGT purposes? For example if I resell the property for £300k, is my CGT liability £300k - £240k (as the £20k is seen as a cost in the trasnaction) or is it £300k - £220k.

Arthur Says
The £20K is a cost of the transaction, and the profit in your scenario would be £300K - £240K. However since you are purchasing the property with the intent to sell on in 6 months, the profit would not be a CGT liability but subject to income tax, and probably Class 4 NI

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