Following on from question on ER on sale of house and stables before or after cessation of company's trade, I have a secondary question.
On receipt of the valuation I was rather surprised that the house (3 bed not massive but land) was £900,000, ie a good 75% of the proceeds so CGT not a massive issue on the business section anymore, perhaps.
But it turns out this value is high as planning permission was obtained in 1984. The buyer is a developer.
I keep reading that the proceeds from house area will be tax-free if covered by PPR (we'll ignore the size being larger than 1 acre for now).
And then I read that obtaining planning permission might mean that the increase in value (£350,000 higher than the house/land without planning permission) is liable to tax as trading? But this planning permission was 30years ago! And was in fact for the stables that were built.
Any views please?
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expired
After 30 years the permit has expired, though a new application could be given favourable consideration. Could, not would.
Tax free
I think you are panicking unnecessarily here, planning permission on its own won't always mean that trading occurred or that it won't qualify as PPR (ignoring the section outside the curtillage etc.).
I'm not entirely clear why you think planning permission 30 years ago means its a trading transaction?
How old?
Planning permission has a maximum five year life, unless renewed. If it's been renewed six times, then a case could be made that the application exists purely to increase the value of the property and that brings it into trading.(More precisely it takes it out of the CGT regime)