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Rate of CGT on sale of beach hut

My instinct says HMRC will class it as 'residential'

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Dear All,

Just wondering if anyone here has had a client make a gain on a beach hut, since HMRC published different rates for residential and non-residential gains.

As the summary says, my instinct is that HMRC will treat this as a sale of residential property, despite the fact that you cannot live in the property on a full time basis (no sleeping area or bathroom).

Anyone have any idea what rate the gain will be subject to?

Thanks in advance

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26th Jun 2019 15:04

What does the legislation say? HMRC are subject to the law; they can't just make stuff up. Well they can but it's not then beyond challenge.

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to Accountant A
26th Jun 2019 15:10

Being truly honest, I skimmed the legislation before posting here in the hope that someone had dealt with it in recent times.

Yes half of the correspondence we receive from them seems made up!

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to We're_all_mad_here
26th Jun 2019 15:15

The clue is in the question, how does the legislation define residential for the purposes of the 28% and 20% dividing line?

Ie does it refer to a "dwelling" or "dwelling house"?
I don't know personally, but that will then in turn answer your question.

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26th Jun 2019 15:15

I've not read the legislation either but it's difficult to see how a hut without bedroom or bathroom could be described as a residential property in ordinary parlance (which is obviously not the determining factor).

What's the Council Tax position? Is the use of the hut restricted by lease, etc.?

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to Accountant A
26th Jun 2019 15:22

I do not know the point re lease, however I am lead to believe that non domestic business rates are paid to the council.

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26th Jun 2019 15:22

For most of these huts overnight stays are actually not allowed. I would suggest that it cannot therefore be classified as a 'residential' property since you can't reside in it.

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26th Jun 2019 15:26

Thanks all.

I will check out the legislation re: definition of a dwelling to see whether this applies.

It looks like I fell in to an age old trap of reading an out of date This is Money article, which was written before the 2016-17 CGT rate changes (i.e. that stated 18% and 28%)

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26th Jun 2019 15:27

The answer is plain as day in the legislation. It's obvious. It's simple.

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26th Jun 2019 19:00

You need to read Aweb more diligently. Only yesterday I posted a link here re this. See:

https://www.accountingweb.co.uk/any-answers/how-to-calculate-cgt-of-fore...

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By 356B
to Justin Bryant
26th Jun 2019 19:28

But on a different thread..........................

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to 356B
27th Jun 2019 09:06

That's my point!

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to Justin Bryant
27th Jun 2019 10:57

Liniking to a thread you posted a link in, rather than just reposting the link is the lowest form of complete fuchtardery IMO.

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to Vile Nortin Naipaan
01st Jul 2019 11:20

But the point would be rather lost then wouldn't it (possibly you don't bother reading anything diligently or more likely you are simply too thick to get simple & obvious points like that)?

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to Justin Bryant
01st Jul 2019 11:31

It's a vain point. (Vain as in useless.)

Thus:

- do you read every post on every thread yourself?
- do you think we all should?

Or perhaps you think we should all view AWeb solely through your profile? To see if The Great Man has deigned to speak to His subjects?

That's not fuchtardery, but it's pretty narcissistic. Vain, even. (See what I did there?)

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01st Jul 2019 16:26

even so do we know the rate... we use? No one appears to have put their chips down?

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to Tom 7000
01st Jul 2019 16:29

Everybody knows the rate to be used. It's just that nobody can be arsed with stating the bleeding obvious.

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