Do I have to pay CGT?

nubbins

V_Cooper wrote: »

The land is attached to our house and garden. Total size of whole plot including agricultural yard, barn, house and garden is under one acre (Estate Agent estimates it is 0.7 of an acre). The garden is slightly bigger than the yard. We can walk out to the barn without any gate as we removed part of the hedge to drive the ride-on mower from the barn, where we keep it, to the garden. The yard is concreted as about 45 years ago it was used by an agricultural machinery repair premises by a previous owner of the house. A potential buyer put in for a Certificate of Lawful Use for double-glazing business in it and it was refused by the Council as they still class it as 'agricultural' rather than business premises. Do you need any more information, I will reply asap.

You can use the link below to measure your plot size exactly, go to the link below, type in your postcode, find your property and then click on the boundary with as many points as needed. Gives you the calculation in metres,feet, hectares and acres.

https://www.daftlogic.com/projects-google-maps-area-calculator-tool.htm

00ec25

saajan_12 wrote: »

If it takes longer there are further allowances that may help, but I suspect you won't have to worry about the exact order of sale from a CGT perspective.

errr....have a read... "land which is disposed of separately after the disposal of the residence cannot qualify for relief."

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64377

although as with much of tax there is always some greyness ....
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64381

for example... "if the contract for the disposal of the land is dated after the date of conveyance of the dwelling house, then relief will not be due."
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64385

as for the land the rest of the manual may also be worthwhile...
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64350p

AdrianC

V_Cooper wrote: »

Our neighbour wants to buy this land and barn prior to us selling the house and garden.

00ec25 wrote: »

errr....have a read... "land which is disposed of separately after the disposal of the residence cannot qualify for relief."

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64377

...

for example... "if the contract for the disposal of the land is dated after the date of conveyance of the dwelling house, then relief will not be due."
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64385

My highlighting...

00ec25

AdrianC wrote: »

My highlighting...

saajan_12 wrote: »

If it takes longer there are further allowances that may help, but I suspect you won't have to worry about the exact order of sale from a CGT perspective.

my highlighting ... in what way is Saajan the OP?
Well done AdrianC for being able to highlight and quote someone else's post when that someone replied to someone else's comment about different circumstances not in the OP.

AdrianC

My apologies - I'd missed the diversion from the original question.

V_Cooper

Thank you, it depends whether they class exchange of contracts as the date of conveyance. We definitely don't want to sell before exchange on the house in case it all falls through and we are left with the yard sold and no one willing to buy the house. I'm wondering who could give us a cast-iron guarantee about exact timeline and CGT - would a solicitor know this stuff? Or an accountant? Preferably, does anyone know of who we could contact in HMRC to get them to confirm our liability in writing to CGT before we make any commitment to sell to the neighbour. All your information
is greatly appreciated, and thanks for taking the trouble to reply to me.:T

00ec25

V_Cooper wrote: »

Thank you, it depends whether they class exchange of contracts as the date of conveyance.

for tax purposes the date to be used as the date of disposal ("sale") is (technically) the date the contract became "unconditional"
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg14270

in nearly all cases (but Adrian C please note: not every case) of purchasing a property the disposal date is the date of exchange.

Usually any conditions in the contract are "conditions subsequent" and are resolved by suing for breach of (binding) contract - hence a wise person insures the property from date of exchange! https://forums.moneysavingexpert.com/discussion/5759961

V_Cooper

Thanks, that makes it clear that we would definitely have to sell before exchange of contracts, and would involve a leap of faith that the person buying the house would not drop out at the last minute, leaving us with the possible prospect of the neighbour then obtaining planning on the barn. It's built on the border of our garden, so I think you have made up our minds that it is too risky/stressful - as if moving house isn't a stressful enough process anyway.

Many thanks to all contributors on this question.:T

V_Cooper

Me again folks. Following on from this, our agent is saying we may well get a better deal selling as two plots, and he's actively pursuing this route. So inevitably I need MSE forum's help again. If we have to pay CGT by selling the barn after the house, how is this done, ie. does our solicitor inform the tax office /do we put it on our tax returns? How do we get the valuations done for when we bought the property (20yrs ago) and the date of sale to work out the gain? Is this all sewn up by an accountant perhaps? Any help gratefully accepted as we haven't got a clue. Many thanks.

00ec25

V_Cooper wrote: »

Me again folks. Following on from this, our agent is saying we may well get a better deal selling as two plots, and he's actively pursuing this route. So inevitably I need MSE forum's help again. If we have to pay CGT by selling the barn after the house, how is this done, ie. does our solicitor inform the tax office /do we put it on our tax returns? How do we get the valuations done for when we bought the property (20yrs ago) and the date of sale to work out the gain? Is this all sewn up by an accountant perhaps? Any help gratefully accepted as we haven't got a clue. Many thanks.

:wave:
if you are already required to submit a tax return then you must include the full details of the CGT calculation even if no tax is payable assuming the plot sells for more than £45,200 (4 x the annual exempt allowance of 11,300 @ 17/18 rates)
https://www.gov.uk/capital-gains-tax/work-out-need-to-pay

if not already registered for a tax return then you only need report the transaction if you have CGT to pay (which is likely anyway). If not already required to submit a tax return, but you have CGT to pay, you can declare via the "real time CGT "service"
https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax
or do it via signing up for a tax return and submitting it then

although it is self assessment tax it is in your best interest to have the properties professionally valued as at 20 years ago. Unsurprisingly that is work for a professional valuer. Plenty exist, arguably the best will be a member of the Royal Institue of Chartered Surveyors who additionally holds the valuation qualification. You can find ones near you by searching the RICS members list setting the "accreditation" in the criteria list on the left to valuer
https://www.rics.org/uk/find-a-member/

value at date of sale is the selling price, now't more, now't less

the point being HMRC will not accept your figures at face value, they will get their own valuers (The Valuation Office agency or VOA) to pass judgement on what you submit, so being wildly out with your valuers is "inadvisable". Having your own professional on hand to argue his case may be useful (although obviously could be expensive in fees) since he has the creditability in front of the VOA to shoot down their figure and "persuade" them to use his

if you don't fancy doing the tax calc yourself then find a tax accountant familiar with CGT (not all accountants do tax, and not all tax do CGT)