My tenants have asked to buy my property by paying me instead of getting a mortgage. Their rent is £500 per month and they want to pay £1,000 per month to purchase it from me. Its value is £80,000. What are the tax implications of me receiving payments monthly instead of at the point of sale? What is our legal position? What are the problems to avoid and how should l get an agreement drawn up?

Arthur Weller replies:
From a capital gains tax (CGT) perspective you are treated as selling the whole property today, the date of the exchange of contracts, even though the sale proceeds are only going to be received over a period of time. You will see this in HMRC’s Capital Gains manual here: www.gov.uk/hmrcinternal-manuals/capital-gains-manual/cg14260. However, you do have the option of paying by instalments any CGT due (see CG18601 and CG14910). This is a tax column, so with regard to the legal position etc., you will need to seek further advice.