I bought a property in 1996, whilst living overseas, which has been continually occupied by my parents. Although my parents contributed, and largely covered the mortgage costs during this time, we did not have a formal contract drawn up. From 1996 to 2006, this property served as my UK base. However, I did not electorally register, as I was non-UK resident, but had mail and other correspondence sent there and visited probably once every four to six weeks. In 2006, I returned to the UK full-time, but moved in with my partner in another part of the country. This property has never been my principal private residence (PPR), except during the ten years from 1996 to 2006, when it served as my ’UK base’. I am now thinking of selling the property to my parents (at below market price), but am unsure of the tax implications.

Look at www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64455. I think that from the facts that you have described you would find it hard to convince HMRC and the courts that this house was your qualifying PPR from 1996 to 2006. If you made an election at the time, then it would have been a different story. If so, if you now sell the property to your parents there will be capital gains tax to pay based on the difference between its market value today and what you originally paid for it in 1996. Since you and your parents are connected, the tax rules do not look at what your parents actually pay you now, but instead at today’s market value www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg14530. Maybe it is worth speaking to a tax adviser, because possibly he could identify a bare trust here (depending on the facts), meaning that your parents were the beneficial owners of the property from 1996 onwards, and there is no necessity to sell to them today. See www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg70230.