Mr A has owned a commercial permises for 20 years over which preiod it has been rented out as such.
The lease is coming to an end and the tenenant will not be re-newing.
Mr A is of retirement age and doesn't want the hassle of owning rental property so decides to sell.
He can get a better price if he gets planning permission to turn the property into 4 flats.
How will this be taxed.
My thoughts are there will be CGT at 10/20% on the difference between cost and the value prior to planning permission and any uplift in value following planning permission will be taxed as income at marginal rates as the intention has changed and so Mr A has changed from investor to property developer.
Is this correct?
I am looking at BIM60560 as my primary source
Many thanks in advance.