Landlord wants his house back

[spudqueen]

A neighbour has rented her house for 10 years. She has no rent book and pays cash. Her landlord has now given her notice to quit as he wants to move in himself. He currently lives in another house he owns in the area. My neighbour is now in a position to buy the house but he won't sell it to her as he says that he would have to pay capital gains tax on it as it is a second home, so he is selling the house he currently lives in as he won't have to pay tax on that. Is this correct as she is very upset at having to move? Is there no way she could buy the house off him without him having to pay tax? (He has offered to sell her the other house but she doesn't want that). Thanks for your help.

[d0gsb0dy]

Don't know much about this sort of thing, but this may help http://tinyurl.com/dkcpc
Good luck.

[shehin]

How much would the capital gains tax be? 

Your neighbour might be better off paying a higher price (to include the tax) for the property if it would be very distressing for her to move....just an idea!!

[woofgang]

shehin I think that if she pays a higher price, the govt see that as making more money, so the capital gains still goes on top if you see what I mean?

[ICEMANSAV]

sorry supd queen but he is right sale of a property that he does not currently reside in is subject to capital gains, the one he lives in can be sold without that tax. The way round it as you have no rent agreement or tenancy agreement ( it seems ) would be for your friend to move into his house and vice versa and declare that change of address and sign a formal rent agreement for the other house then sell that house he has moved into to your friend then move back, bit long winded but it may be a way round, that is of course if he wants to live in your friends house.

[Kev_UK]

You should go to the Citizen's Advice Beauraux or a solicitor, I believe that although you don't have a written agreement you still have rights after 7 years, as long as you can prove you've lived there for that amount of time.. witnesses, bills, bank statements, etc with the address on them.
I think you have squater's rights too.
What he is planning to do is illegal.. it is tax evasion !!!

[Kev_UK]

Also.. you pay him in cash.. this is classed as an income.. I bet he hasn't paid tax on the money. I think you have got him by the short and curlies.. he could face a lengthy prison sentence!!

[morg_monster]

Its not illegal to do this - it is tax avoidance not evasion.  Perfectly fine I think.  Although I'm not sure what the IR would think of Iceman's plan - or is that what you meant Kev?

Surely it would be more upsetting for your friend to have to go through things like squatters rights, threatening legal action etcetera just to stay living in the house.  Just something to weigh up in the whole scheme of things.