CGT confused

matesalka

Hi, I own a property since 2013. I have been offered £ 240.000 to sell a plot at the end of my garden. I have already consulted with several estate agents and they said it would not effect the market value of the house selling the plot. My question is if I decide to sell will I have to pay CGT and if so how is this worked out as the sale is only on the plot of garden not the main house. This is not my main residence

Thanks

Keep_pedalling

If you have lived in this property the whole time you have owned it then there is no CGT to pay, but I would not believe those estate agents, reducing the size of the plot has got to reduce the value of the remainder.

xylophone

This is not my main residence

And never has been?

Then it seems likely that CGT will be payable?

https://www.gov.uk/tax-sell-property/what-you-pay-it-on

matesalka

Yes it has been my main residence but not since the house has been in my name. (It is my childhood home that was transferred to me). So I understand that Capital Gains Tax would be payable but how to work out how much tax would be payable?

Keep_pedalling

You will need to get a professional valuation of the plot of land at the point you were gifted / inherited it.

kidmugsy

Keep_pedalling wrote: »

I would not believe those estate agents, reducing the size of the plot has got to reduce the value of the remainder.

Darn right!

booksurr

matesalka wrote: »

Yes it has been my main residence but not since the house has been in my name. (It is my childhood home that was transferred to me). So I understand that Capital Gains Tax would be payable but how to work out how much tax would be payable?

main residence is only relevant for the period during which you were its owner (in legal terms there are other circs, but they don't apply here)

so, have you lived in it as your only/main residence AFTER it was transferred to you? Yes or No.

- If Yes you will be entitled to gain some relief but there will then be other questions needing answering as that will bring further factors into play as well.
- If No you won't

your CGT gain will be the difference between what you sell for (you say 240k) and the historic "cost" of the portion of land which you sell.

the historic cost will be the market value of the land at the date you first acquired it (date of transfer?) and obviously will therefore be a portion of the overall value of the property. Given it looks likely you are exposed to CGT you would be best advised to get a professional valuer to help you work out the historic cost portion since patently there is a huge difference between a house with a large garden and a house with a small garden. It is not simply £ per sq metre of garden as shown by the fact you can sell off the plot for building purposes

I assume your 240k offer reflects the fact planning permission has been obtained rather than it being an indication of the size of the plot you are selling!