I read an article that stated from 6 April 2016 CGT rates for commercial property have been reduced to 10 per cent for basic rate tax payers and 20 per cent for those subject to tax at higher rates.
https://www.rsmuk.com/ideas-and-insights/tax-voice-april-2016/reduction-in-cgt-rates-for-commercial-property
I am selling some garages that are jointly owned by myself and my brothers, and these have been rented out for storage for the past 50 years. We now have planning permission for 2 semis on the site and have agreed a sale.
I cannot find a clear guide on HMRC website that defines the CGT rule that applies to the sale of the garages (Excerpt from HMRC site is shown below***).
Can anyone advise whether we qualify for the lower CGT rate? The garages are not 'residential property' but does that mean they are automatically 'commercial property' and fall into the lower CGT bracket - we are not a business, the garages are jointly owned within our family so I would like to understand how the rules are applied.
Many thanks
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*** HMRC’s website states:
‘The following capital gains tax rates apply (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first):
10% and 20% tax rates for individuals (not including gains attributable to residential property and carried interest);
18% and 28% tax rates for individuals for residential property and carried interest;
(I cannot find any pointers to determine what the term ‘residential property’ means. Neither is there a link to any explanation as to the meaning of ‘carried interest’)
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