CGT Part Disposal

CGT Part Disposal

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  A Private residence of 1.4ha is selling a 0.14 paddock with residential planning permission to a family member .

The Main residence is valued at £1.4M and the Paddock at £300K, however the paddock is being sold for £100K

In assessing for CGT Private Residence Relief, I am looking for advice on how to define the Permitted Area, as I understand that this is not always limited to 0.5ha, and also that Paddock land may be considered as part of the Garden/Grounds.

The House and Formal Garden is 0.16ha, and the Paddock, of 0.14 ha,  is to the front and side of the house and is directly accessed from the front garden. Would I be correct in assuming that  the paddock  can be included as part of the Permitted area.

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By MJShone
16th Dec 2014 10:09

You might be right

There are two hurdles to jump:

1) Is the paddock part of the garden and grounds?

2) If so, is it also part of the permitted area?

HMRC accept that paddocks are part of garden and grounds, unless there's significant business use - see CG64360.

You then have to work out what part of the 1.4ha is the permitted area. Usually that would comprise the house plus garden and grounds close to the house. The formal garden would be highly likely to be included. However, is there any other "garden" or "grounds" that might take precedence over the paddock? For example - back garden, garden to the side(s) of the house.

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