Hi
I have a mixed use property (part restaurant, part holiday-let) and want to dispose of only part of it. Assume the book (cost plus cap-ex) value is £1m for the whole, say - but the property has appreciated and each part is worth 800k now, giving a total property value at £1.6m
Am I required to revalue both parts and crystallise a capital gain on sale of one part, or can I dispose of 800k leaving a book value of 200k for the residual part (with the embedded gain un-crystallised)?
Thanks in advance for your help!
Replies (2)
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Are you asking a tax question or an accounting question? If tax, why would you not apply the normal part-disposal rules (A/(A+B))?
Proceeds £800k
Cost £500k
Gain £300k
Carry cost remainder £500k
A/(A+B)
800/ (800+800)x £1m=£500k