Damages & compensation
Posted: Thu Apr 20, 2017 1:09 pm
My client owns a house which is neither his PPR or rented out.
A developer has offered £750,000 for the house which will be demolished and for the development. The offer has been accepted and it has been suggested by the Chartered Surveyors that it may be necessary to split the consideration into (a) consideration for the property which is valued at £400,000 and (b) any damages for loss that may be non-taxable of £350,000.
The damages are said to cover rights of light and other development dependencies i.e. crane overhang, site cabin on the land, inconvenience. If the property is sold before the development has started and no light has been lost during ownership, how can my client be entitled to compensation for his loss of right to light and use of the land etc? Am I missing something?
If the damages are included in the sale agreement, are HMRC likely to agree that they are non-taxable?
Many thanks,
A developer has offered £750,000 for the house which will be demolished and for the development. The offer has been accepted and it has been suggested by the Chartered Surveyors that it may be necessary to split the consideration into (a) consideration for the property which is valued at £400,000 and (b) any damages for loss that may be non-taxable of £350,000.
The damages are said to cover rights of light and other development dependencies i.e. crane overhang, site cabin on the land, inconvenience. If the property is sold before the development has started and no light has been lost during ownership, how can my client be entitled to compensation for his loss of right to light and use of the land etc? Am I missing something?
If the damages are included in the sale agreement, are HMRC likely to agree that they are non-taxable?
Many thanks,