Roll over relief into part of private residency

Roll over relief from gains used to buy home

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Hi 

Client sold commercially used property(say 100k gain )  ... bought new residential (200k say ) looking to use part of new property to work from home (big double garage and office in-house ) 

roll over relief ? How to value ? 
Thanks 

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By whitevanman
24th Oct 2019 23:17

Theoretically possible but I would say highly unlikely based on the inadequate information provided.
A distinct part of a building can be treated as a separate asset but it must be used exclusively for business purposes (difficult with a garage or a room in the home).
If you get past that you need to consider the rules.
If the commercial property gives rise to a gain of £100k it is likely the disposal proceeds (consideration) was somewhat in excess of that sum (just guessing you understand). I would guess that the percentage of the £200k paid for the residential property that is attributable to any part used exclusively for business, would again be small. So, the whole of the consideration has not been reinvested in qualifying assets. Some partial relief could be due but again that would require (I would guess) a much larger investment than seems likely. I hope you can see why inadequate information is of little use on a forum such as this!
Say the original asset was sold for £200k with a gain of £100k. The new property cost £200k but only say £10k related to the part used exclusively for business. Result, No relief due. That would be so even if the £10k was in fact £100k. Only if it exceeded that figure might some partial relief be due.
As I say, I would guess no relief would be due but the information given is inadequate for a definitive reply.

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Replying to whitevanman:
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By Tax Dragon
25th Oct 2019 00:01

Great answer to a dreadful question.

I hope the OP appreciates that fact.

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Replying to whitevanman:
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By cathhammond
01st Nov 2019 10:27

Thanks for this , I understand , hard to give full info in a bite size but you got my drift . Thank you

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