A client inherited a field including a barn some years ago. The property has now been sold with planning permission for the barn for residential use. The barn is presumably 'residential' for CGT purposes but what about the field?
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There aren't enough facts to say for sure, I wouldn't be so certain that the gain on the barn was a gain on residential property. The legislation (TCGA 1992, Sch 1B) says:
"3(1) For the purposes of this Schedule a person “disposes of residential property” if the person disposes of an interest in land in a case where–
(a)the land consisted of or included a dwelling at any time falling on or after the date on which the applicable period begins,
(b)the interest in land subsisted for the benefit of land that consisted of or included a dwelling at any time falling on or after that date, or
(c)the interest in land subsists under a contract for the acquisition of land consisting of or including a building that is to be constructed or adapted for use as a dwelling.
3(2) No account is to be taken for the purposes of this paragraph of any time falling on (or after) the day on which the disposal is made."
The fact that the barn has planning permission doesn't make it a dwelling and doesn't mean that it will ever become a dwelling.
Does the barn look like a house ? Is it fit for human habitation ?
If not, it's best not to make too many assumptions here.
If the barn is a barn that has to date only been used to store agricultural supplies or machinery, or shelter animals, it's not a dwelling, it's an agricultural building. The outline planning permission doesn't change that. It has to be converted into something suitable for occupation as a dwelling before it becomes a dwelling.
Is no-one (else) worried by the change of words between Sch B1 and Sch 1B?
B1 referred to a building "in the process of being constructed or adapted for such use" (being use as a dwelling).
MJShone quotes the new words above.
I stand corrected (thank you). The old words have been carried over, but the new words are new, are they not? Or am I missing something in B1?
Do the new words cause no one (else) any concern?
"A person “disposes of residential property” if the person disposes of... land... including a building that is to be constructed or adapted for use as a dwelling."
Further context: you're selling to a builder.
You need to be careful when dropping words out. 3(1)(c) needs to be read in its entirety.
I think 3(1)(c) refers to the situation, for example, where someone has bought off-plan and sells their interest on.