Questions of Cash: ‘South Africa’ was stitched into the kit. It should say ‘Holland’

Q: My daughter was chosen as part of a group of 16 girls for a school hockey trip to Holland during the spring half-term last year. At a pre-trip meeting, parents were encouraged to order sports clothing for the event that would carry embroidered details of the trip.

We paid £64 in May for a sports top, hooded top and tracksuit bottoms. The clothing for the whole squad arrived from the supplier, Kukri, before the trip, unembroidered, with the promise that the kit could be returned after the trip for this to be added retrospectively. It was returned but “South Africa” was embroidered on the clothing instead of “Holland”. The school sent it back to be changed, but the corrected kit never arrived. DL, Solihull

A: You contacted us in September – and the corrected kit eventually arrived, in two batches, in December. During those three months we have persistently contacted Kukri to request this matter be resolved. We understand that a serious illness to a senior member of staff, plus IT problems, caused the delays and customer service failures. But we expect a reasonable- sized business such as Kukri to have sufficient resilience in its systems to cope with problems of this kind.

Kukri’s spokeswoman says a combination of factory errors and “quite a lot of internal change” meant the case wasn’t dealt with properly. She adds: “All I can do is sincerely apologise. We do really care here at Kukri, but from this email trail you are well within your rights to think we don’t and are a bunch of idiots.”

Q: In 2007 my son, who was in the RAF, wanted to buy a rental property – anticipating a time when he would leave the forces. As he was regularly on duty in Afghanistan, my wife and I helped him to buy a small house, putting up 20 per cent of the purchase cost, with him covering the repayment mortgage and all three of our names on the mortgage. The deal was at 5.5 per cent for three years and then reverted to 1 per cent above base rate.

My son has now left the RAF, got married and wants to sell the house. But my wife and I would like to keep it as a rental property, so we agreed to repay him what he had invested through his mortgage payments. With the interest rate being so low, we do not want to take out another mortgage, so my son’s name will remain on the loan but my wife and I will take over the payments. My question relates to the £23,000 that we will now pay my son. What tax, if any, would be due on this money? IB, Gloucestershire.

A: David Truman at the accountants Menzies says: “HMRC would take the view that the reader’s son is essentially disposing of his share of the property to his parents, with the sale proceeds being the £23,000, which they are paying to him in cash. As the parents and son are connected persons for capital gains tax [CGT] purposes, the disposal value would be deemed to be the open market value of his share of the property. There would therefore be a CGT charge on the difference between the market value at the time of transfer and the original purchase cost. This would be payable at 18 or 28 per cent depending on the son’s level of income in the tax year.

“There are some factors that could be utilised to help reduce the chargeable gain. There is an annual CGT exemption of £11,000 per person if not used elsewhere. A proportion of the costs of acquisition and disposal – stamp duty, professional fees – can be excluded from the charge. The reader could also consider transferring part of his share to his wife before the transaction to utilise her annual exemption and any of her remaining 18 per cent tax band. Finally with regard to the mortgage, speak to the lender, advise it of the transaction taking place and seek its approval.”

Questions of Cash cannot give individual advice. But we’ll do our best to help if you have a financial dilemma. Email us at: questionsofcash@independent.co.uk