Taper Confusion

Taper Confusion

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My client purchased a cottage in 1973. The upstairs was used for letting purposes from 1973-1992, the downstairs was incorporated into the shop.
In 1992 the whole cottage was converted to a letting unit.
In 2001 the whole cottage was again converted and incorporated in the shop. No private residence is involved.

The business ceased in February 2006 and the cottage willagain be converted and sold as a self contained shop, probably in the summer or autumn of 2006.

What taper relief will be due if sold in 2006, or what relief if not sold until 2007.
holly gilbert

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By User deleted
09th Jun 2006 19:02

Taper relief
Firstly, you can disregard the period before 6 April 1998 for taper relief. On this date, it was a letting unit. Let to who though? Basically, if let to an unquoted trading Company or to a qualifying Company, partnership or his own sole trader business, it will qualify as a business asset. In 2001, it was converted and again the same applies up until 6 April 2004 when on that date, the unquoted Company is relaxed to include any trading partnership/sole trader business. This is a very brief answer and I really recommend having at a look at the Capital Gains Tax Manual on the Revenue website, if you don't have any other resource material to hand.

The business ceased in Feb 2006 and during the conversion in 2001, no doubt there are periods when the premises were not let to any business.

Where there is a mixture of business and non business use, the gain is apportioned accordingly and the business part will get full 75%, and the non business part will get 8 years plus a bonus year (35%) if sold prior to 6.4.07.

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