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Entrepreneurs relief on sale of Property/B&B

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Hi All,

This is probably a simple question, but it isn't something I have had to deal with before.
I have posted a separate question regarding winding up a company, but have separated this question as I think it is different enough.

I have a client who is selling a B&B that is also their only home.
It is owned personally and there has been no rent charged to the company for use of the property.

My question is regarding whether it can be treated as a business asset, whether there is a claim that some/all of the property is considered as their main residence and no capital gain applicable.
Are there any other considerations I need to ensure I can claim entrepreneurs relief on the sale.

Apologies if this question is quite simple, but I want to make sure I get it right, and as a part time sole practitioner, it is not something I come across very often.

Thank you.

Replies (6)

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By jcace
22nd Jun 2019 21:13

If the property has been used as their main residence, then PPR should be available for those parts of the property not used exclusively for the B&B.
Per HMRC Capital Gains Manual CG64663:
"TCGA92/S224(1) only excludes from relief any part of the dwelling house which is used exclusively for the purposes of a trade, business, profession or vocation. So a room which is used partly for business purposes and partly for residential purposes will qualify in full for relief."
Have a look at the whole page, as it gives an example of a small guest house.

Thanks (1)
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By Tax Dragon
23rd Jun 2019 08:06

This is where one of the issues with letting a company use property without determining the basis for that use can come and bite an advisor on the [***].

In order to be able to run a B&B, the company must have unhindered use of the property. To the extent that it has had such use, the individual clients won't get PRR.

It's your job now to maximimise their relief, but you'll need a clear understanding if you don't want it (or, indeed, some of the past treatment) to unravel on enquiry. It might just be worth buying in a bit of help.

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Replying to Tax Dragon:
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By Tax Dragon
23rd Jun 2019 08:08

How come [***] is allowed but I'd get censored for singing a song by The Wurzels?!

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Replying to Tax Dragon:
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By Tax Dragon
23rd Jun 2019 08:09

Ah. That told me. But only half of me.

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Replying to Tax Dragon:
By SteLacca
24th Jun 2019 11:12

What's a combined harvester got to do with anything?

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Replying to SteLacca:
Hallerud at Easter
By DJKL
24th Jun 2019 11:24

Is that two places to eat joined together?

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