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Where Taxpayers and Advisers Meet

Annexe now separate dwelling - liable for CGT?

shoestring
Posts:22
Joined:Wed Aug 06, 2008 3:52 pm
Annexe now separate dwelling - liable for CGT?

Postby shoestring » Mon Sep 18, 2017 11:56 am

Hello. I've had a good look through the cgt posts and I can't find anything that quite matches my - or rather my parents - situation.

They converted the detached garage of their house to an annexe back in about 1980. My sister lived in it for some years and then, in 2010, we bought the house from them (it was their main residence, they moved to Cornwall) and a boundary was established making the two dwellings separate.
Earlier this year they wanted to sell it off so naturally we bought it - it was valued at £240k and that was the price we paid. The transaction went through in April. Presumably, since they have never lived in the property it is liable for CGT, but what is the gain? And when does it need to be paid?
Many thanks for any light you might be able to shed!

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Annexe now separate dwelling - liable for CGT?

Postby maths » Sat Sep 30, 2017 2:25 pm

I suspect that any gain on the sale of the barn will be subject to CGT.

It may have been that the "dwelling" originally comprised the house plus barn and surrounding grounds. Hence a sale of everything would have been CGT free.

However, once the main house was sold all that was left was the surrounding land (including the barn) which on sale would not qualify for private residence relief.

The sale of the house would have been a partial disposal and the retained land/barn would have attributed to it an appropriate proportion of the original cost. Market value of the land/barn would be the deemed sale proceeds.


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