Am I liable for capital gains if I 'rent' a house to my son? | Money | guardian.co.uk

Am I liable for capital gains if I 'rent' a house to my son? | Money | guardian.co.uk

Q I have just sold a second house for £85,000. For the past 17 years I have rented it to private tenants, but sold it because it needs a lot of money spending on it, was quite far away from where I now live, and I want to help my son get on the property ladder.

My intention is to buy a house outright for £80,000 and let him buy it off me for £500 a month rent for the next 160 months. He does not have to pay me any interest. I will be paid this monthly for the next 13 years or so, which will take me into retirement when my pensions kick in.

I know I could put the money in some kind of a savings account and withdraw the capital plus some interest over the years, but I want to help my son and his girlfriend get a house.

Am I correct in saying that the £500 a month rental purchase from him would not be classed as income? This second house I sold was initially inherited by me at a value of £65,000. Any capital gains tax (CGT) I may have to pay should be a small amount. However, since I am reinvesting the money in another house for my son to eventually buy from me, will I be exempt from CGT ?