Houseboat Gift and Capital Gains

[Norman Stanley]

A 74ft Dutch barge houseboat with an engine has been gifted to his daughter.
It was originally bought 3 years ago in disrepair for £160K and was completely refurbished for £40K. Hence total cost £200K.
It is moored at a pier and has been let as a residential houseboat for 2 years with connections to utilities (electric and water).
It is currently valued at £500K if sold.
Per HMRC's manual below is this houseboat a wasting asset even though it may be deemed an immobile residence because it has been moored at the Pier for 2 years and connected to utilities but because it has an engine will it be exempt from CGT?
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64328
My concern is the value has gone up so much that there is a gain and would need reporting if it is not exempt as a wasting asset and HMRC challenge it as a dwelling even with the barge having an engine?
Any thoughts.
NS

[bd6759]

The test isn’t whether it is a residence (it is not a residence because it has not been lived in as a residence), but whether it is plant. That will require detailed analysis.

It seems that the body has been used the premises within which a fhl business was carried on. That would mean it was not plant in an capital allowance sense. ( Benson v The Yard Arm Club)

With the amount at stake, it might be worth getting a proper opinion based in the facts.

[maths]

I'm only aware of a couple of tax cases which relate in fact to caravans not houseboats. The important difference is that re caravans it is often the surrounding land that is of value and in respect of which the taxpayer would want CGT exemption on disposal. Re houseboats on a canal/river there would seem to be no such surrounding land.

My guess is that as in the current case there is I assume a workable engine fully installed and ready to go that the boat lacks the degree of permanence to qualify as a "dwelling-house" (despite connections to electric etc) in which case there would be no CGT exemption on any gain on sale.

[Norman Stanley]

Thank you for your thoughts. Have recommended the client to seek a specialist's advise. Will await the outcome and let you know. Many thanks NS