Sale of garden to developer CGT?

C

caz6238

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Hi

We are selling our house and garden to a developer - subject to them obtaining planning permission for a detached house in our garden. Are we subject to capital gains tax or as we are selling the whole house and garden does that make the transaction not liable to CGT?
 
The transaction will be partly liable to CGT - essentially the development premium on the site is taxable. You will need to obtain specific professional advice on this and this advice should enable you to minimise your liability.
 
Selling your home (and garden)of over 1 year means you have no CGT. But selling a site subject to planning brings you into the CGT bracket on the garden alone (2 separate contracts maybe). You will need to value both separately within the aggregate price keeping the site as low as possible but still somewhat realistic.
 
thomasmc01 said:
(2 separate contracts maybe). You will need to value both separately within the aggregate price keeping the site as low as possible but still somewhat realistic.
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I wouldn't regard this as particularly good advice in the context.
 
Thomasmc01 is incorrect. Sale of house and garden together could fall within ambit of CGT notwithstanding PPR relief. Also sSale of house first followed by sale of garden will mean entirety of proceeds for garden being subject to CGT with no attending PPR relief.
 
If your house and garden(up to an acre) has a value as a house of 1 million and the developer is willing to pay you 2.5 million,then you pay CGT on the difference between current use value and hope value,which would be 20% of 1.5 million
 
Thanks for your help guys - area is nowhere near 1 acre and house not worth 1mill (I wish it were!!) - we have lived here for 10 years - purchased for £90K in 1996. House is worth apx £225K and offer for garden is £160K so I assume we have to pay CGT on the £160K then? Other way to do it to reduce liability I assume is to get more money for house and less for garden!
 
Just to clarify (seeing as you're using £ signs), I presume this property is in the Republic of Ireland? If it isn't then ignore all the posts above as these are presumably predicated on the workings of the Irish CGT system.
 
Hi

The property is in the UK - Yorkshire to be precise.
 
Sorry - didn't realise!! Glad I live in the UK then as I was getting worried about the 20% I'd have to pay. Thanks for all your help.

Caroline
 
CGT still applies under UK tax law. Rates are staggered at 10%, 20% and 40% as far as I know. Not sure of exact rules, but they're not the same as under Irish tax laws.
 
The UK also has a much higher annual personal CGT exemption - c. £10K versus our €1,270 if I recall correctly.
 
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