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Where Taxpayers and Advisers Meet

Business outbuildings included in PPR

dotto
Posts: 51
Joined: Wed Aug 06, 2008 3:16 pm

Business outbuildings included in PPR

Postby dotto » Wed Oct 07, 2009 11:14 am

I am purchasing a property that stands in half an acre and which the vendor currently occupies. The vendor runs a small business from outbuildings at the entrance to the site, for which he has planning permission for his personal use only. When the sale is completed, the business will move elsewhere and the buildings will no longer be able to be used for business purposes. The vendor is selling the whole of the site as his PPR but will pay HMRC tax on his business operations. I would just like to check that it is in order for him to sell the whole site as his PPR, and that HMRC would not regard the outbuildings as commercial property or anything and demand that it is sold separately. If that was the case what sort of value could be put on outbuildings that would not be able to be used as business premises by anyone else.

Thank you for any advice you can offer.

pawncob
Posts: 4444
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Business outbuildings included in PPR

Postby pawncob » Wed Oct 07, 2009 4:31 pm

If the "business" buildings are within the curtilage, and included in the transfer, that's it. HMRC can't "demand" anything.
(And why would you care what the vendor's tax position is anyway?)
With a pinch of salt take what I say, but don't exceed your RDA

dotto
Posts: 51
Joined: Wed Aug 06, 2008 3:16 pm

Re: Business outbuildings included in PPR

Postby dotto » Wed Oct 07, 2009 4:59 pm

Thank you for your response. Can I take it then that it is OK for the whole site to be taken as PPR for the vendor. The vendor and myself have been to see an accountant who is supposed to be letting us have this information but getting hold of him is nigh on impossible - although I appreciate this is a busy time of year. The vendor and myself are working together to ensure we cover all eventualities.

Many thanks again.

pawncob
Posts: 4444
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Business outbuildings included in PPR

Postby pawncob » Wed Oct 07, 2009 5:24 pm

Don't take anything for granted.
The vendor is selling the whole of the site as his PPR but will pay HMRC tax on his business operations.
This surely means that he will be declaring the business proportion as a chargeable gain, which means it isn't all PPR.
With a pinch of salt take what I say, but don't exceed your RDA

dotto
Posts: 51
Joined: Wed Aug 06, 2008 3:16 pm

Re: Business outbuildings included in PPR

Postby dotto » Thu Oct 08, 2009 12:09 pm

I am therefore now assuming that because the vendor has used the outbuildings as a business, and they belong to him, HMRC would not now allow him to include these buildings in his PPR. Would this mean I would have to purchase this part separately, and he would incur capital gains tax on the buildings. If this is the case how does the vendor establish the value of the buildings both for HMRC purposes and for sale to me, because as stated previously I would only be able to use them as outbuildings, not for any business purpose. Also, the buildings would not then be included as my PPR, which would mean, I think, that if I was to sell the area in the future, I would also incur capital gains tax.

I hope I have made this clear enough and hope even more that you can help.

Many thanks again for your time.

DC

pawncob
Posts: 4444
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Business outbuildings included in PPR

Postby pawncob » Thu Oct 08, 2009 12:25 pm

You don't have to purchase the business part seperately. The CGT position is the vendor's problem not yours.
He is selling the "business" part and CGT may apply to that depending upon HIS circumstances.
You will be purchasing only a PPR. What happened prior to that purchase does not affect your PPR position.
With a pinch of salt take what I say, but don't exceed your RDA


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