I have a client who built a substantial garage in his garden in which to house his small collection of classic cars. It was large enough to have a flat on the first floor, which was rented out and included on his Tax Return as rental income.
The garage has now been sold to a developer who is going to convert the whole building into a residential property. Should the gain on the garage be returned as a "Land & Property" transaction or as a "Residential" transaction? on the client's Tax Return.
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Should the Garage sale be returned at all, can it be argued it was part of his PPR?
The flat itself looks like such a claim is unlikely , the garage though , can it be considered differently as part of the dwelling in which he presumably still resides?
Leaving aside the PPR etc argument, I believe you need to consider whether there is a residential property interest at ANY time in the client's ownership.
As you start with the phrase "who built a substantial garage in his garden" then I'd say a residential transaction.