CGT on exchange properties

Lewis_Gerolemou

Is it possible to exchange two commercial properties. A commercial tenant wants to acquire the freehold of premises he holds on a long lease from us. he has offered a building that is part shop part flats in exchange. They are of similar rental value so can we effect an exchange or do we have to sell and incur CGT.

Murdina

There is an extra statutory concession D26 which provides a relief for exchanges of interests in land in very limited circumstances - see http://www.hmrc.gov.uk/manuals/cg4manual/cg73001.htm and thereabouts to see if you fit the criteria. I don't think you do though as somewhere along the line you both have to have held the land.

Otherwise you would as you say both be liable to CGT because you would be disposing of a chargeable asset for consideration. It may be possible for you to use the relief under s 165 TCGA 1992 for gifts of business assets if the transaction were structured in such a way that each party made a separate gift without one being the consideration for the other.

I think professional advice is best taken here, unless someone else comes up with a neat solution.

Lewis_Gerolemou

Thanks Jimmo, it looks like we have a non starter here.

Murdina

Jimmo I totally agree with you and that is actually what I conclude in my post. However, anyone who did a search on HMRC manuals might well find this to my mind not helpfully entitled concession and think it applies, when it does not - but mentioning it makes that clear that it does not. I respect you and your background too (thanks for nice comments - I too am an ex inspector - hope you did not train in Brum too) but as I've been a gamekeeper turned poacher, I try and reply anticipating the sort of stuff clients threw back at me i.e. a man in the pub says I can do this...........

I actually had just this experience with this specific concession, which is why I replied to the post and mentioned it in my reply. Maybe I should have made that clearer but I tend to think as I write.

Lewis_Gerolemou

Jimmo, can you advise me how the Revenue calculate the value of commercial premises,is it a simply caculation involving the rent, what other factors are taken into account?