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bigduckontax
bigduckontax, Accountant
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Council wants to acquire my investment flat to turn it along

Resolved Question:

Council wants to acquire my investment flat to turn it along with other flats into a care home. It may even use CPO if necessary.
I will lose out big on capital gains tax. I never wanted to sell this flat and leave it in my inheritance so that there is no gains tax to pay. I also lose on income as well.I have read somewhere that I could be entitled to roll over relief on CGT. Please, confirm if this is the case. If yes, is the relief available if I sell the flat through negotiation or under COP.If the relief is available what sort of assets could i acquire? Can I buy any sort of investment other than another property? Can I buy shares?
Submitted: 29 days ago.
Category: Tax
Expert:  bigduckontax replied 29 days ago.

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

They might not get a CPO. The Wandsworth Borough Council tried twice to get my parent's home in Streatham Hill in 1962 and failed on both occasions to get a CPO. It is still there, now in a conservation area. They actually sold out to the council. but only because it was the quickest and easiest and they wanted to move anyway.

Here is the guidance from the Gov UK Web Site regarding the relief:

'Eligibility

To qualify for Business Asset Rollover Relief:

  • you must buy the new assets within 3 years of selling or disposing of the old ones (or up to one year before)
  • your business must be trading when you sell the old assets and buy the new ones
  • you must use the old and new assets in your business

You can claim relief on assets including:

  • land and buildings
  • fixed plant or machinery, eg a printing press'

You can only use Rollover Relief to buy an new investment property in your case. Remember that the Relief merely postpones the tax until ultimate disposal of the new asset.

'

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

Customer: replied 29 days ago.
1. Is there any way knowing at this stage as to what are the chances of council getting CPO?2. Is there any way of knowing before hand whether council may be successful in getting CPO?3. My intention was to leave the property as part of my inheritance and thus save CGT, would it make sense not to voluntarily sell the property to the council?4. Disregarding CGT could I expect to receive the same amount of money (to include market value and compensation) whether I sell by negotiation before CPO or after CPO?5. Can you give me some more examples of assets I could buy as roll over relief?
Expert:  bigduckontax replied 29 days ago.

1. No not really, it may have to go to a public inquiry and then be approved by the Minister. It could be a long process particularly if there are many objections.

2. Only through informed guesses by local professionals.

3. You could, that is what my parents did at a price fixed by the District Valuer. However, unless Rollover Reflief applies, see my earlier response, CGT would be immediately payable.

4. These should be the same.

5. Only a new investment property.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 29 days ago.

Thank you for your excellent support.