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Buachaill, Barrister
Category: Law
Satisfied Customers: 10527
Experience:  Barrister 17 years experience
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I own all 3 leasehold flats in a converted whole house built in about 1880. I'm in th

Resolved Question:

I own all 3 leasehold flats in a converted whole house built in about 1880. I'm in the process of buying the freehold and then applying for planning permission to convert it back into a house. We used to live in one of the flats as our principal private residence but since then it has been rented out, as have the other two flats. My question is around the liability for capital gains tax at the point we convert the building back into a house, which we would move back into. Does it crystallise any CGT when the whole whose becomes our PPR?
kind regards
Submitted: 1 year ago.
Category: Law
Expert:  Buachaill replied 1 year ago.
1. Dear *****, No, there is no crystallisation of any CGT liability merely because you change the use of the three rented flats into a house. CGT is charged only on a "gain", so there has to be some realisation of a profit in order that any CGT liability would occur. Under CGT law, owners are allowed to change the use of a dwelling or building as many times as they wish without there being any corresponding crystallisation of a CGT liability. It is only upon a sale that there is the reaslisation of a gain which then would potentially trigger some CGT liability. However, CGT is a tax on a "gain" not a tax on a change in use.
Expert:  Buachaill replied 1 year ago.
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