New 30 day CGT reporting and split commercial/residential property?Make Text Bigger
Can anyone clarify the new rules? UK residents must now declare any Capital Gains due on a residential property within 30 days of completion.
According to the HMRC website, the rules do not apply to Commercial property. My solicitor has said that if any part of a property is rated Commercial then the whole property is deemed Commercial.
It would need a Commercial EPC for example and be subject to Business Rates (both apply to my property). I have just sold a commercial premises consisting of a shop and flat over. The flat can only be accessed via the shop and doesn’t have a separate entrance.
However, on checking with HMRC, they have said that such a property needs to be split and valued separately for CGT purposes, even though the property was purchased as a single unit originally and sold as one unit. This now involves extra cost and additional valuations.
Has anyone else experienced this situation and how did they deal with it?
REMINDER – CGT rules are changing in April 2020 >> https://www.property118.com/reminder-cgt-rules-are-changing-in-april-2020/
From HMRC >>
When you need to report Capital Gains Tax within 30 days
If you live in the UK, you may need report and pay Capital Gains Tax when, for example, you sell or otherwise dispose of:
- a property that you’ve not used as your main home
- a holiday home
- a property which you let out for people to live in
- a property that you’ve inherited and have not used as your main home
But you won’t have to make a report and make a payment when:
- a legally binding contract for the sale was made before 6 April 2020
- you meet the criteria for full Private Residence Relief
- the sale or disposal was made to a spouse or civil partner
- the gains (including any other chargeable residential property gains in the same tax year) are within your tax free allowance (called the Annual Exempt Amount)
- you sold the property for a loss
- the property is outside the UK
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