We have a client looking to sell a mixed commercial and residential property to a relative.
There are so many things to think about with this transaction but these are the headlines which are causing me concern
- date of exchange is set to be pre 3/3 for obvious reasons
- The purchaser (who is also a client) is needing to sell 3 properties in order to complete the deal. So the completion date is currently unkown. From a legal viewpoint this appears to be fine.
Q1, are there any anti-avoidance measures which would stop the tax rate being locked in on the sale of exchange should completion take an inordinate amount of time? Therefore making tax rates at point of completion relevant?
- the property is mixed residential/commercial. So there are different CGT payment timing rules for each.
Q2, if (for arguments sake) the completion was delayed for 12 months. Would we then be in the situation that the gain attributable for the commercial side would need to paid under the "old" timing rules and therefore 31/1/22 and the tax due on the gain of residential not due until 30 days after completion? So potentially the CGT due on the commercial element due before any cash had changed hands (due to exchange being prior to 5/4/21)
I feel like my answer to Q2 is corret but could do with a steer on both parts.