Permitted Development Barn Conversion

[craig1987]

Good afternoon everyone,

Firstly thank you for any information that i may be given it is very much appreciated.

I hope i am in the right section for my question as i think it could quite possible fall in to a few different categories.

Right, here is my situation!

My fiance's parents kindly suggested around 18 months ago that we convert a barn that they have on their land, since then they have luckily been granted PERMITTED DEVELOPMENT to convert this into a four bedroom dwelling, the barn has around 2.6 acres of land attached to it but is currently used for her dads business (this is also down as part of his business residence) for storing eggs/potatoes etc as this is what he supplies in the local area.

Going forward i believe that the plan is to put the land/barn under our name before we commence with any building work, so to clarify, myself and my partner would be owners of a barn with 2.6 acres of land that has been granted permitted development for a four bedroom dwelling.

So, i would very much like to know, what is the best process for her parents handing over the property to us?

I am assuming that there will be some form of tax to pay on this, obviously we would like to do this in the best way possible so as not to incur any avoidable fee's.

I have read quite a few confusing articles online which suggest there may or may not be CGT or IHT to pay also the suggestion of her parents placing the property in a trust fund under my partners name then folding the trust.

Any clarification would be greatly appreciated, thanks in advance.

Craig.

[taxplanet]

There are a number of issues that need to be explored here.

On the face of it any gift of property by one individual to another(s) is potentially chargeable to both capital gains tax and inheritance tax. The former may be avoided if the gain can be heldover following the provisions of either TCGA 1992 s165 or s260, and the latter may be avoided if the donor lives for 7 years following the gift and retains no benefit in the property gifted.

These issues, and other matters to be considered, are complex and merit discussion with, and detailed written advice from a tax specialist who is competent to advise on both taxes. The full nature of the issues to be discussed and advised upon are beyond the scope of a forum such as this.