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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13947
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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A farm is selling a cottage and a portion of farming land

Customer Question

A farm is selling a cottage and a portion of farming land which was purchased as adjoining land to the existing farm. The cottage has been let as part of the farming business alongside other farming activities. My question is whether the cotttage will constitute a business asset for cgt so that rollover relief can be claimed?
Submitted: 11 months ago.
Category: Tax
Expert:  Sam replied 11 months ago.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Expert:  Sam replied 11 months ago.

Hi

Thanks for your patience - I am afraid not as the farm cottage has been let out so not used as part of the trade up to sale (rental income is no trade income I am afraid) so no additional business reliefs due

Let me know if I can assist furtehr

Thanks

Sam

Customer: replied 11 months ago.
I had read that if letting was part of the farm business then it would qualify?
Expert:  Sam replied 11 months ago.

Hi

I am afraid that is not the case only furnished holidays lets have been in the past treated as trade income of which this is not - andonce you starting letting the property out it ceased to be an viable asset used in the business whih has to be one of the criteria for any business releifs to apply -

This is the consideration here https://www.gov.uk/capital-gains-tax-businesses/what-you-pay-it-on

and the rules here see point 5 https://www.taxation.co.uk/Articles/2014/03/12/321751/power-10

YOu can see renting out some of the business property is a bad move always to avoid loss of business reliefs of any type

I am sorry the news is not better

Thanks

Sam

Expert:  Sam replied 11 months ago.

Perhaps you can show me the link to where you feel this is the case as I use either HMRC legislation or where possible from a known accountants site (as its usually in plain English and easier to get points across)

Thanks

Sam