We are a married couple in our early 60's with the intention of retiring in the next three years. I am 62 years old and my wife is 61. We have two children in their early thirties (32 and 31 respectively). We still have an outstanding mortgage of £151,000, which we want to pay off by selling our house to our son for the value of the outstanding mortgage rather than the market value of the property. Is this feasible? And how do we process it?

Arthur Weller replies:
You can sell your house to your son for whatever figure you choose. But the capital gains tax (CGT) rules treat your sale to a connected person as though you sold it to them at present market value. www.gov.uk/hmrc-internalmanuals/capital-gains-manual/cg14530. This will be advantageous to your situation. If the house has always been occupied by you as your main residence, you will not have to pay any CGT, since the capital gain is covered by principal private residence relief. But your son's acquisition value for CGT purposes will be this higher value. However the stamp duty land tax when you sell to your son will be calculated on the amount he actually pays you.