I think I know the answer to this one but I'm not certain, it relates to PPR and transfer of land.
Client owned House A and his mother lived at House B which was adjacent. Client's mother died some years ago and he inherited House B (which was later transferred into 50/50 owenship with client's wife). Various improvements to House B were made, it was rented out for some years and then sold last year for a profit, which even after taking into account improvements, the split ownership and the capital gains allowance will still amount in some capital gains tax, the client never lived in House B so if wouldn't attract any PPR relief. After acquiring House B but before selling it the client moved from House A to House C some distance away, at the time House A would have attracted full PPR relief and no CGT paid.
So far so good - however two of the improvements to House B involved the acquisition of land, one was bought from a neighbour, client has the records and I am including the value of the land as an improvement in the calculation. The complication is that some land was transferred from the deeds of House A (the clients old private residence) to House B, the value at the time would only have been a few thousand (based on the value of the other similar land acquired at arms length around the same time).
The client had initially wanted to include this land under the improvements - but clearly this is not right as there was no cost to acquiring the land - it was freely transferred. My question is would any PPR attach to this small section of land, which at one point had been part of the Client's PPR? TCGA 1992 s222 refers to disposing of an interest in:
"(b)land which he has for his own occupation and enjoyment with that residence as its garden or grounds up to the permitted area"
This criteria appears to be met and had this land been disposed of with House A it would have qualified fully for PPR relief, when the land was transferred to the deed of the second property it still remained under the ownership of the client, although it ceased to be part of the principal residence at that point.
Any advice welcomed.