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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My personal private residence and garden sits on 1.43 acres

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My personal private residence and garden sits on 1.43 acres and planners have indicated that an infill development comprising 2 detached houses on .87 acres would meet with their approval subject to the usual conditions ...... what would my capital gains tax liability be if I sold the plots once planning is granted bearing in mind the permitted area is only .5 hectares? I should add that the house and gardens have not changed in the past 200 years!
Hi. If you could show that the "excess" land was required for the reasonable enjoyment of the property, then you might be able to claim full relief from CGT provided that you met the other criteria for main residence relief as set out in HS283. Failing that, then the proportion of the gain applicable to the non-exempt one-fifth of an acre will be subject to CGT. The first £11,100 of gains made by an individual in 2015/16 will be tax free. You will need to have the house and the land valued separately and then apportion the original cost of the whole property or the 31 March 1982 value if it was bought before that date between the land being sold and the house and land being retained. You can then do the calculation to apportion the gain between the exempt part and the taxable part. You will need a reliable land valuer to do this and have his report in writing. Many land valuers are well versed in this type of work. HMRC are looking ever closer at land transactions so you would need reliable figures as they do use the District Valuer to look at submitted calculations and valuations. The plot you may sell should not be fenced off before the sale goes though not should you be tempted to share in the profits of the development if an offer like that is made to you as that will open you up to HMRC taxing you as a property developer. I hope this helps but let me know if you have any further questions.
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