Where's the capital gain??

Where's the capital gain??

Didn't find your answer?

Client buys a house with approx. 1/4 acre of land. Obtains planning permission and sets up a business covering most of the land. Business operated through a limited company with annual rent being charged for use of the land. Business and house now being sold, apportionment between price for business and price for house agreed... However, on the basis of rent being charged and there being a business use of the land attached to the PPR, presumably there is a capital gain?? How do you suggest this is dealt with??

Replies (1)

Please login or register to join the discussion.

avatar
By Paul Soper
17th Sep 2012 22:23

Apportionment

s224 TCGA provides that where part of a gain on the disposal of a dwelling house arises and part has been used EXCLUSIVELY for the purposes of a trade or a business then the PPPR exemption cannot apply to that part of the gain - how is this determined?  The act refers solely to 'apportionment', without specifying what this means, and so the skill is to negotiate the most favourable apportionment you can identify.  Is this based on land values, square footage, rental values, etc etc - if you leave it up to HMRC and the Valuation Office they wil come up with a suggestion that might give the maximum gain that could arise.  You need a valuation specialist who can counter these arguments and is used to dealing with these valuation issues.  That is certainly not you, nor is it a local estate agent unless they are genuinely valuation specialists.

Thanks (0)