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Where Taxpayers and Advisers Meet

CGT on rented property and private pony paddock

garymison
Posts:1
Joined:Wed Aug 06, 2008 3:02 pm

Postby garymison » Wed Mar 12, 2003 2:42 am

I have a bought to let property which I have owned and let for two years, never living in it.I now wish to sell with I think about 35K profit.

I also have some land (11 acres) owned for 3 years which I use for private grazing. I wish to build stables on 3/4 of the land, sell this and keep a quarter for myself with I think a profit of 30K. Am I liable for CGT?

My Partner and I live together in another property solely in my name which we also want to sell and amalgamate all three ventures to purchase a new property.

Would it be best sell my current residence and move to the let property for a while therefore not paying the CGT? or is there another way.
Thanks

Nigel Lord
Posts:518
Joined:Wed Aug 06, 2008 2:18 pm

Postby Nigel Lord » Wed Mar 12, 2003 2:54 am

Gary

The proposed sale of the let property will give rise to a chargeable capital gain if you sold it without living there. It would therefore be advantageous to move into the property for a short while prior to its sale. This would ensure that you could claim Principal Private Residence (PPR) relief in respect of the last 36 months of ownership.

You would certainly be liable to either CGT or income tax if you undertook the proposed development and sale of the grazing land. You should take professional advice to mitigate the liability. It may be appropriate to use a company to undertake the development. There are also VAT implications and the method of undertaking the venture would be crucial to ensure that input tax is recoverable.

My firm specialises in this area of taxation. If you would like us to assist you further we would be delighted to do so.

Nigel Lord
Lord Associates
Taxation & Business Consultants
102 Smarts Lane
Loughton
Essex, IG10 4BS
020 8508 1642 & 07769 931852
lordassociates@ntlworld.com


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