Tax on garden sale

We have a property that we rent and a developer wants to buy part of the back garden for new build housing. Can anyone let me know if we will be liable to pay any tax on this?

Thanks!
Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity.
Martin Luther King
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  • Keep_pedalling
    Keep_pedalling Posts: 16,441
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    If the gains are high enough you will have a capital gains tax liability.
  • Cook_County
    Cook_County Posts: 3,085
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    Best to sell soon before the government reintroduces a development land tax.
  • tebthereb
    tebthereb Posts: 162
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    edited 9 July 2017 at 3:26PM
    Dazflash wrote: »
    We have a property that we rent and a developer wants to buy part of the back garden for new build housing. Can anyone let me know if we will be liable to pay any tax on this?

    Thanks!

    Assuming the amounts involved are not tiny you really need to take proper advice on this from a qualified tax advisor, as there are a lot of variables here and there is the potential to both save a lot of tax and also to really mess it up and get hammered by HM Revenue & Customs.

    The past use of the property, current ownership/structure of the property, proposed structure of the deal, are a couple of potentially relevant factors - and this is even before getting into the anti-avoidance rules which can apply to treat receipts from 'slice of the action' type deals with developers as subject to income tax, not capital gains tax.

    Please, take proper paid advice at an early stage and do not rely on a forum for such things as this is a complex area of tax and good advice will be valuable. *removed by Forum Team, please remember that asking users to contact you directly is not allowed - if it's good advice then please share it with everyone! That's what it's all about! :)*
  • le_loup
    le_loup Posts: 4,047 Forumite
    tebthereb wrote: »
    Please, take proper paid advice at an early stage and do not rely on a forum for such things as this is a complex area of tax and good advice will be valuable. Contact me direct if you like.

    Hmmmmmmmmmmmmm!

    Not touting for business are you?
  • tebthereb
    tebthereb Posts: 162
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    No I am not.

    I was trying to be helpful. I have no business; I am an employee. The thrust of my post was clearly to take advice. Not to take advice from me.

    I added the line you focussed on as some people may not know where to go for help on this sort of thing so saying to them "get help" is not entirely helpful. I certainly dont when it comes to, say, plumbing.

    I do know where he can go for help as I work in tax. I probably wouldnt recommend my firm for low value/simple stuff as we are not best value there.
  • le_loup
    le_loup Posts: 4,047 Forumite
    Thank you for clarifying that.
  • Dazflash
    Dazflash Posts: 5 Forumite
    I have followed up on this and have got mixed advise. HMRC said that even though the property is let, because the area being sold is less than half a hectare, and the fact that I will still own the house, no CGT is payable at this time. It would be eligible if and when i sell the house.
    But the accountant for the developer told me CGT would be due.
    I will recontact HMRC for further info and post here with feedback
    Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity.
    Martin Luther King
  • 00ec25
    00ec25 Posts: 9,123
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    bear in mind that the person you spoke to at HMRC will be a call centre person with little or no technical knowledge of CGT. They will simply be reading scripts off the helpdesk system. Those scripts deal with very simple scenarios and unless you speak to a CGT specialist (which you won't as you won't be put through to one of them) you will only get a general answer

    the developer's accountant on the other hand regularly deals with such situations and presumably knows more details about your particular deal than the HMRC call centre person was given?

    in other words, if you contact HMRC again make sure you go through every detail and establish if the person you are talking to knows CGT, or is just employed to answer the phone.
  • tebthereb
    tebthereb Posts: 162
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    I would not place any faith in HMRC's comments either.

    Reference to half hectare relates to the exemption for your main residence, which I am guessing this is not although I suppose it could be relevant if it was in th past (as I suggested before points like this need exploring with a proper advisor).

    The developer will likely know the main issues but they will be thinking of themselves, not you.
  • Vaskor
    Vaskor Posts: 12 Forumite
    I would have expected it to be treated as a part sale, so you would pay CGT on the proceeds less the deemed market value when you acquired the property, less any unused CGT annual allowance. I'm an accountant, but not a tax accountant, though, so this isn't my specialist area.
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