Redundant farm building occupied ancillary to dwelling

Redundant farm building occupied ancillary to...

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If a barn is occupied as an office ( for private work, not business ), as a children's playroom and as a store for old stuff, should it be regarded as part of the dwelling house entity or as a building in the grounds?  There is a low wall between this and the farmhouse.  I am at present arguing that all the buildings and the courtyard are exempt, as well as the main house and garden and adjacent paddock.  There is no exclusive business use and indeed no farming use by the occupier.  Area claimed is just over a hectare. Value of said area circa £1.5m

HMRC argues via the DV that only the main dwelling, garden, garage and paddock are exempt.  I think that is not sustainable because a sale of this kind would attract buyers who would want other buildings with the property.  HMRC also seem not to take on board that the use of the yard and buildings, notably the barn, has bee for personal purposes.

Thoughts?

Replies (4)

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chips_at_mattersey
By Les Howard
28th Oct 2014 11:34

Question

Is this a Direct Tax or Indirect Tax question?

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By dropoutguy
28th Oct 2014 11:24

CGT

It is a CGT private residence issue.

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By codling
28th Oct 2014 13:12

Permitted area

 CG64236 is quite helpful in such cases. The size and character of the dwelling House must be properly considered. The DV needs to consider whether all of the different bits form the entity of a dwelling house and he then needs to give proper reasons if he feels that they do not. He cannot just pick and choose what he wants to be exempt, without giving reasons as to why - although this seems to be the norm.

I recently concluded an enquiry that had been ongoing for two and a half years regarding an extra building that the DV had originally decided was not part of the entity of the dwelling house for no good reason I could see. HMRC's closing remark was to say that whilst he did not agree that PPR applied, he was not going to pursue it any further. There was tax of £20,000 at stake so clearly he knew he was on a loser if he had tried to pursue it further.

 

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By dropoutguy
15th Nov 2015 03:36

I won

HMRC backed down.  Liability reduced by £100k.  Client very pleased.

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