How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3821
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I would like to split/separate our detached family home into

Customer Question

I would like to split/separate our detached family home into two properties and sell one or both. It is a barn and we purchased (for £57k) and converted two thirds of it into a house in 1995 , finishing off the last third of the building in a second phase in 2004. The conversion cost about £300k over all those years so we don't have a firm purchase price at a given date.
It has been my wife and I only home since 1995, we are both in our late 40's. Today its valued at £850k as a whole but £1.1m (£700k and £400k) as split with building work conversion costs of just £45k. I have read a lot on the subject now but would like to see an informed opinion of the capital gains calculation that would apply to us if we sold the smaller one of the properties(valued at £400k)
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Pleas advise the total site area occupied by your property and garden. Once I know this I will be in a position to assist you further.

Customer: replied 1 year ago.
Hi Keith, The overall plot is about a quarter of an acre so I believe that is about 1000 square meters.
Expert:  bigduckontax replied 1 year ago.

Provided that plot is below half a hectare. and a quarter of an acre is well below this, any sales of all or part of the plot would attract Private Residence Relief (PRR). PRR relieves Capital Gains Tax (CGT) at 100% so thre would be no CGT to pay.

I do hope that you have found my reply of assistance.

Customer: replied 1 year ago.
Did the rules change as I read a lot about the new/second property value increase being subject to CGT, or is all of that trumped by the half a hectare? Would you be able to point me in the direction of the relevant HMRC documentation for the half hectare PRR relief.
Expert:  bigduckontax replied 1 year ago.

Have a look at HMRC Helpsheet 283 which you can find here:

https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet

You will need a wet towel round your bead and the backs of lots of used envelopes to assist!

I would not worry though as your overall plot is within the 'permitted area.'

Customer: replied 1 year ago.
OK, that's great..thank you
Expert:  bigduckontax replied 1 year ago.

Delighted to have been of assistance.

Please be so kind as to rate me before you leave the Just Answer site.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.

Thank you for your support.

Related Tax Questions