Over 16 years ago my mother gifted me £40k from the sale of her home that I agreed to use towards buying a flat in my name for her to live in. There was a proviso to the gift that I was to give my brother £20k from the sale proceeds of the flat.
This agreement was reached as my brother was unwilling to finance half of the remaining purchase price of the property, but the £20k was his share of the potential inheritance that had been reduced by the £40k gift to me.

She has now passed away and the flat has been sold and I have given my brother £20k of the proceeds. Is that £20k deductible from the gain I have made for Capital Gains Tax purposes as the net proceeds I have received from the sale are £20k less than the actual gain?

  • You probably would have saved yourself a lot of trouble if you had structured it as a 20k gift and a 20k loan... – Vality May 20 '19 at 19:19
  • "I agreed to use towards buying a flat in my name for her to live in" means that was a gift with reservation of benefit, so will still count as part of your mother's estate for Inheritance Tax (IJT) purposes. It is possible to get hit with both the IHT on the estate and CGT on your gains. – Owain May 20 '19 at 20:38

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