A: Indeed you have heard right. This little-known loophole remains an entirely legitimate way to buy another property and dispose of it without having to pay any CGT.
The best way to do this is to set up a formal written trust before you buy the property with one or both parents named as the trustees.
You would purchase the property via the trust by loaning the trust the deposit and the trust would take out the mortgage. You would need to personally guarantee the mortgage.
A "life interest trust” allows you to name a single child as a beneficiary, and that child also has a right to the income from the property. A “discretionary trust” allows you to name any number of children as beneficiaries.
With both types of trust, the named beneficiaries can become what are called life tenants, which gives them the right to live in the property rent-free.
A discretionary trust is a more flexible choice because one child could occupy the property for a few years, then another sibling could take over the property at a later date.
By naming your children as beneficiaries they activate their own principal private residence relief when they move into the property. This is the relief that exempts a homeowner’s main property from CGT.