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CGT tax to pay selling benefit of easement?

Tax to pay on payment to give up right of way easement over neighbours property on primary residence

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I own a freehold property which is my primary residence which has a right of way across my neighbours property which is named on my deeds. I paid £495k in 2007 for the property which included this right of way. It is now valued at £850k. The land is less than 0.2 of an acre. My neighbour has offered to pay me £30k to remove this benefit. I am proceeding with the giving up of the right of way now and will follow with the of my house an unrelated buyer a few months later.

The questions are:

  • Is  the removal of this benefit exempt from the CGT under private residence relief as the value of the property is lower as it will no longer include the benefit?
  • If not, how would CGT be calculated? I'd argue that the value of this benefit was not far off £30k back in 2007 as it's value isn't a function of the property value. However, is there a standard formula one applies to calculate this? 

Replies (4)

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Psycho
By Wilson Philips
07th Aug 2020 18:33

Interesting. I assume that the property has other means of access? Otherwise I imagine that it’s drop in value would be considerably more than the £30k. As to the treatment of the £30k I would instinctively say this is a capital sum derived from an asset, not eligible for any relief and with minimal, if any, base cost.

But it may require more careful thought - for which you should be prepared to pay. For instance, it strikes me that PPR might in fact apply - but I’m not prepared to investigate without my palm being crossed with silver.

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Replying to Wilson Philips:
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By Tax Dragon
07th Aug 2020 19:04

Snap.

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Replying to Tax Dragon:
Psycho
By Wilson Philips
07th Aug 2020 19:07

Tax Dragon wrote:

Snap.


What’s your brother got to do with it?
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Replying to Wilson Philips:
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By RetiredTax
08th Aug 2020 18:25

Or even his Auntie Rrhinum!!

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