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Where Taxpayers and Advisers Meet

CGT selling a Smallholding

oldenss
Posts: 6
Joined: Wed Aug 06, 2008 4:03 pm

CGT selling a Smallholding

Postby oldenss » Tue May 21, 2019 10:34 am

Approx 11 years ago a bought an unconverted barn set in approx 6acres. We converted the barn and have been living in it as our main house for 10 years and now wish to sell. Once converted around 1 acre became the garden with the other 5 acres being an agricultural field. The best way to describe it would be a smallholding with various outbuildings. I paid 150k for the barn and land (unconverted) with conversion costs etc of approx 140k and expect to sell for 550k........what would my capital gains tax implications be?

DFord
Posts: 1
Joined: Tue May 21, 2019 10:44 am

Re: CGT selling a Smallholding

Postby DFord » Tue May 21, 2019 10:56 am

Approx 11 years ago a bought an unconverted barn set in approx 6acres. We converted the barn and have been living in it as our main house for 10 years and now wish to sell. Once converted around 1 acre became the garden with the other 5 acres being an agricultural field. The best way to describe it would be a smallholding with various outbuildings. I paid 150k for the barn and land (unconverted) with conversion costs etc of approx 140k and expect to sell for 550k........what would my capital gains tax implications be?

You need to treat these as two separate assets. The sale of the barn plus 1 acre whould qualify as a main residence and won;t need to be disclosed on your tax return as the amount of land is within the permitted amount allowed by HMRC. The other land and outbuildings will be taxable. You will need to get the 5 acres and outbuildings valued at the date of purchase (11 years ago) to calculate the capital gain.

oldenss
Posts: 6
Joined: Wed Aug 06, 2008 4:03 pm

Re: CGT selling a Smallholding

Postby oldenss » Tue May 21, 2019 10:14 pm

Approx 11 years ago a bought an unconverted barn set in approx 6acres. We converted the barn and have been living in it as our main house for 10 years and now wish to sell. Once converted around 1 acre became the garden with the other 5 acres being an agricultural field. The best way to describe it would be a smallholding with various outbuildings. I paid 150k for the barn and land (unconverted) with conversion costs etc of approx 140k and expect to sell for 550k........what would my capital gains tax implications be?

You need to treat these as two separate assets. The sale of the barn plus 1 acre whould qualify as a main residence and won;t need to be disclosed on your tax return as the amount of land is within the permitted amount allowed by HMRC. The other land and outbuildings will be taxable. You will need to get the 5 acres and outbuildings valued at the date of purchase (11 years ago) to calculate the capital gain.
Thanks......your answer makes sense. It seems their is local agricultural price data available so should be quite easy to work out a gain. I have done some simple calculations and it seems that the gain will be less that my CGT allowance.......If my calculations show the gain is less than my CGT allowance and presuming I will make no further capital gains in that year do I still need to show the calculations on my self assesment?


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