Splitting up the family home to release funds

[ted-e]

Hello, I am posting to ask advice regarding the Tax implications of splitting up my family home to be able to release the funds to be able to make necessary repairs to it.

The property is on four floors, three make up the family home and there is a basement. It is a victorian property which we bought in 1980 at which time the basement had been separated from the rest of the dwelling to be a stand alone flat, although it is all listed as one property.

Our family has grown up and fled and we have more space than we need and we think there are opportunities to split the house to sell it in parts which I hope would release funds to be able to afford the repairs required to it. Obviously I shall have to do the repairs before selling it.

I know the implications of selling your primary residence, but how does it work if you are selling part of it? On selling a flat I suppose I shall have to have had the flat I will be selling listed as a separate property - do I then need to pay additional taxes and if so what tax would it attract?

The cost of the repairs will be high and I am worried that the tax I have to pay will negate any benefit of making the repairs and then losing the space.

Please may I ask for any advice - any guidance will be gratefully recieved.

Many thanks, ted-e

[pawncob]

Read this:

http://www.hmrc.gov.uk/manuals/cgmanual/CG64600.htm

The various gains will all attract PPR as it will be the disposal of your Principal Private Residence.

[ted-e]

Thanks, that's a great help.

[maths]

Capital gain arising on the sale of property which has been your primary/sole residence is CGT exempt.

However, if prior to any sale you converted say the basement into one flat and the ground floor into another flat, both flats then being sold, CGT charges may well arise depending upon the values involved.