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Where Taxpayers and Advisers Meet

Private use

kanrent
Posts: 57
Joined: Tue Dec 16, 2014 8:20 am

Private use

Postby kanrent » Wed Oct 16, 2019 4:05 pm

I'm non resident British citezen and let my property to tenants so as from 2015 I'm liable for CGT when I sell it.
During the period while it was being let I fenced of 50% of the garden and kept it for my own private use to store my things, would this portion be exempt from CGT and if so how would it be calculated

darthblingbling
Posts: 319
Joined: Wed Aug 02, 2017 9:09 pm

Re: Private use

Postby darthblingbling » Wed Oct 16, 2019 4:17 pm

Have you ever used the property as your main residence?

AGoodman
Posts: 942
Joined: Fri May 16, 2014 3:47 pm

Re: Private use

Postby AGoodman » Wed Oct 16, 2019 6:22 pm

All land is now subject to NRCGT but non-residential is rebased to April 2019 and subject to tax at 20% rather than 18/28%. This would in theory mean little or no ta).

In practice, I doubt you can treat this fenced off part as a separate property. The legislation says "Land that at any time is, or is intended to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure) is taken to be part of the dwelling at that time." The argument is very hard if you are effectively selling it all together so part of the dwelling. Assuming the whole was residential, any gain on the whole vs the 2015 market value of the whole would be taxed at 18/28%.If you wanted to submit on that basis you should ensure you give full disclosure and there remains a small risk of penalties.

My working assumption would be that the end result is unlikely to be significantly different if the garden is included. If you did separate it out you would have to value the property minus the garden for both 2015 and on the sale. The best you would do is avoid CGT on the 4 year increase in value of a bit of garden.

kanrent
Posts: 57
Joined: Tue Dec 16, 2014 8:20 am

Re: Private use

Postby kanrent » Thu Oct 17, 2019 8:01 am

I lived in the property for 15 years as my main and only residents before letting it

darthblingbling
Posts: 319
Joined: Wed Aug 02, 2017 9:09 pm

Re: Private use

Postby darthblingbling » Thu Oct 17, 2019 8:41 am

You'd get PPR for at least 18 months, and maybe some letting relief if sold before April 2020.

What's the increase in market value since April 2015?

kanrent
Posts: 57
Joined: Tue Dec 16, 2014 8:20 am

Re: Private use

Postby kanrent » Fri Oct 25, 2019 7:22 am

Not sure of the value in 2015 can you tell me how HMRC calculate the value in 2015

AnthonyR
Posts: 304
Joined: Wed Feb 08, 2017 2:33 pm

Re: Private use

Postby AnthonyR » Fri Nov 08, 2019 11:36 am

HMRC have a specialist valuation team that look at these things.

From your point of view you should ideally instruct a surveyor to value the property back then and as a result of the change many surveyors are aware of the need to be able to backvalue to 2015. However, in practice what a lot of clients will do to save money is look at Zoopla or a similar site, work out what the average property price change is in that street over the past 4 years and work backwards.

Although, HMRC might then come and tell you that they think you're wrong which might end up costing more than the surveyor would in the first place.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk


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