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Is BADR time apportioned on a FHL

CGT on FHL

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A residential property has been owned for 20 years, sold & realised a gain of £500K.

It was his PPR for 5 years (including final 9 month period), let as an ordinary residential let for 13 years & let as a qualifying FHL for two years immediately prior to sale.

My view is that PPR relief of £125k reduces the chargeable gain to £375 which is chargeable @ 10% (excluding AE) as it met the FHL criteria for the relevant period & therefore qualifies as a business asset for BADR purposes.  However, an alternative opinion provided is that BADR only relates to two years out of the 20 year ownership period so the gain is actually £125K exempt PPR, £325K @ 28% & just £50K @ 10%.  Is there any merit to the later opinion?

 

 

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paddle steamer
By DJKL
23rd May 2022 12:04

Answer deleted, just noticed your user name.

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By richard thomas
24th May 2022 07:42

I’ve no idea what DJKL’s comment means, but my quick reaction is that you are right. The 2 year test relates to whether the asset qualifies as a relevant asset, but there seems to be nothing in s169S about the status of the asset before then.

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By The Dullard
24th May 2022 09:00

The "opinion" that the OP refers to relates to the restriction that might apply, by virtue of s 169P, if the disposal were an associated disposal, but there's no corresponding restriction for a disposal that is itself a material disposal.

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paddle steamer
By DJKL
24th May 2022 09:04

A user name containing the words " wall" and "1690" is my problem.

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Replying to DJKL:
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By Wall1690
24th May 2022 09:21

Oh Dear, how unfortunate. Have a glorious day & thank you for the original comment which was most helpful.

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By Hugo Fair
24th May 2022 09:30

Ah, the true colours are unfurled!

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