Hi there, Just a quick one, a friend has approached me for advice, I'm a bit rusty having been out of the game for a while! They have acquired planning permission on part of their garden for a building plot. they are about to sell that plot.
How would the CGT computation look? Is it exempt as it's part of the garden?
Thanks for any advice!
John
john jones
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is what I managed to distill my answer down to when a friend asked me this very same question a couple of weeks ago. It could be covered by PPR (if it falls within the rules for garden or grounds) or it could be taxed as income under s776 or even as a venture in the nature of trade (just depending on quite how the deal is done). If all they have done literally is get planning permission and will simply sell it for a given sum then most likely it will be taxed as a gain.Basically you get 100% relief from any gain on your own home “dwelling house” and up to ½ hectare of garden or grounds subject to:
(i) if you have a dwelling house which required larger garden or grounds for the “reasonable enjoyment of the dwelling house” having regard to its “size and character” then you may claim for more land
(ii) it must be in the nature of garden or grounds ie if you had ½ hectare of which part was garden and part was a field arguably the field is not covered.
If the gain is taxable then you will get non business asset taper if you exchange by 5 April and have owned for more than 3 years.
If they have any plans to do anything more complex esp any kind of slice of the action deal (see http://www.hmrc.gov.uk/manuals/bimmanual/BIM60350.htm ) they should get professional advice.