Capital gains on garage sale

gracelet88

I'd be grateful for your thoughts. I'm selling my garage to my neighbours and simultaneously selling the house to another buyer. It will all complete on the same day. The house and garage are on the same deeds for now but the garage is in a block just across from our terraced houses. 

Any thoughts on whether CGT applies or if we're good because of private residence relief?

As our garage selling price is £25k, I'm half tempted to knock £600 off so my partner and I both use our tax free allowance (£12,300) , and avoid the hassle and cost of a tax adviser.

I've never had to do a tax return before so apologies for naivety.

Jeremy535897

You need not worry about the garage, because the combination of its purchase price, acquisition costs and selling costs must exceed £600. If there was no separate price paid, you apportion the total price paid between the house and the garage in the same proportions as the sale proceeds.

In any event, provided that the house qualifies for main residence relief throughout, so will the garage:
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64290

I am assuming you own it jointly, although you say "I am selling my garage" rather than "we are selling our garage".

gracelet88

Jeremy535897 said:

You need not worry about the garage, because the combination of its purchase price, acquisition costs and selling costs must exceed £600. If there was no separate price paid, you apportion the total price paid between the house and the garage in the same proportions as the sale proceeds.

In any event, provided that the house qualifies for main residence relief throughout, so will the garage

I am assuming you own it jointly, although you say "I am selling my garage" rather than "we are selling our garage".

Super helpful. Thank you for explaining and pointing me to the right resources. Indeed "we" are selling. Thanks again