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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4346
Experience:  FCCA FCMA CGMA ACIS
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My home has my business included in it a small dog breeding

Customer Question

my home has my business included in it a small dog breeding business which now coming to an end the property sits on 2 1/2acreas kennels takes 10% of property outside. I consider myself entrepreneur as I was on the enterprise scheme. they also helped me get planning permission. I expect hopefully £400.000 sale of house not as a business. 29yrs ago I paid £60.000. could you give me an idea of capital gains.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Unfortunately, not easily as your demense is over the permitted area and the Valuation Office Agency (VOA), a little known section of HMRC staffed by chartered surveyors, may be called into play to determine just how much of your property should be liable to Capital Gains Tax (CGT) and to how much Private Residence Relief (PRR) (at 100%) should apply.
However, at a worst case scenario you have a gain of 400K - 60K = 340K less your Annual Exempt Amount (AEA) of 11.1K leaves say 329K exposed to CGT. However, instead of the usual 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of sale, Entrepreneurs' Relief, which limits CGT to a flat rate of 10%, would apply leaving you with a bill of a tad under 33K. However, that is a worst case situation and the VOA may well split the values and your exposure be considerably less as PRR is applied to some of the site.
I am not surprised that your tax office gave you various answers. Unless they consulted the VOA they will be as much in the dark as you, and to a lesser extent I, am! The VOA's main function is to assess bandings for Council Tax or rateable values for Business Rates, but they are informed of the value of every landed property transaction so have a very thorough knowledge of local values.
I do hope that I have been able to shed some light on the situation, but I hope that you understand that I cannot be exact. I am not a Chartered Surveyor although I did start my working life as a trainee valuation surveyor!