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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13914
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am considering selling my house that I have owned and lived

Resolved Question:

I am considering selling my house that I have owned and lived in for over 25 years.

Agents have suggested to me that I may achieve a higher price by selling 2 barns separately from the main house.

My question is, will the revenue treat all the sales as a whole or will the main residence be the only thing exempt from tax with a liability due on the barns?
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Hi

Thanks for your question which has been directed to the UK tax forum, of which I am one of the experts.

If you sell the barns separately from the main house, then these will automatically be fully liable to capital gains - with no tax reliefs due, unlike the main house, that will attract private residence relief, for the time this was your main residence.

Even the sale of the barns with the main house may still produce a consideration for capital gains - as these buildings may not be considered as part of the main residence, I have added a link here from the capital gains manual which specifically looks at the position of additional buildings when sold along with the main property - http://www.hmrc.gov.uk/manuals/cgmanual/cg64245.htm

But a spate sell without doubt form a capital gain position

Let me know if you have any follow up questions

Thanks

Sam
Sam and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

Sam


 


Thank you for your reply. I went onto the link you recommended & their form CG64245 seem to suggest that my circumstances may well fall under the term "curtilage" My house is listed with the buildings I wish to dispose of are situated adjacent either side of the house by just a few feet.


 


These buildings have been used for garaging and a wood shed to the house. They in fact form a small courtyard just as described in the afore mentioned form.


 


If I were to sell them separately from the main residence then without a doubt the house would be devalued.


 


I understand you can not give a definitive answer but do you think it would be worth my time asking for The Valuation Agency to give an opinion on whether a sale would be treated to qualify for relief or am I just reading into the articles what I wish to hear.

Expert:  Sam replied 3 years ago.
Hi Arthur

Thanks for your response

In view of the fact you have used these buildings as you advise, then if the sale took place as a whole - then I agree that they would be covered under private residence relief.

But if they were to be sold away from the main property - then that changes the fact that you enjoyed them as part of the whole property and in that instance, you advise you would achieve a higher sale price from selling them away from the main house.

Its true that the house would devalue as a result of the sale of these barns as separate entities, but I would seek advise from HMRC (technical department) rather than the Valuation agency for agreement that the barns, if sold before the main house, will be eligible for private residence relief.
Advise them the way in which these two barns have been enjoyed - and that they are all accessible from the courtyard, and not fenced off.
Refer to CG64245 from the Capital gains manual

That way you have covered your own position, if HMRC can agree their sale prior to the main house, is not going to give rise to capital gains.

But I would still advise
1) have a valuation of the house if it were to be sold WITH the two barns
2) The two (or three) valuations of the house on its own, and each of the barns (or the two barns together if that is the plan to sell them as a pair)


Let me know if you have any follow up questions and it would be appreciated if you could rate the level of service I have provided, so I am credited for my time





Thanks

Sam


Customer: replied 3 years ago.

Hi Sam


 


That all sounds like excellent advise, and I will do exactly as you suggested.



Many thanks



Arthur

Expert:  Sam replied 3 years ago.
Hi Arthur

You are very welcome

Thanks

Sam