CGT Tax / Outbuilding and Business


M

MrHappyChap

If I have a stone outhouse (on the land of primary residence) and
convert it to use exclusively for use as an office and business
storehouse, and sometimes customers might be there, then upon sale of
primary residence (including outhouse) then CGT tax would probably be
owed on the outhouse.

If the business is really a small part-time business with not a lot of
profit being made, is it possible that the CGT tax eventually owed on
the stone-barn could actually be greater than the profits made from
the business, and therefore making the whole idea of having the
business rather pointless?
 
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J

Jon Griffey

If I have a stone outhouse (on the land of primary residence) and
convert it to use exclusively for use as an office and business
storehouse, and sometimes customers might be there, then upon sale of
primary residence (including outhouse) then CGT tax would probably be
owed on the outhouse.
If you use it exclusively for business then you will have a problem.
However with careful planning you may be able to avoid CGT.

CGT and private residence can be a minefield, so you should speak to
your accountant.
--
Jon Griffey FCCA ATII
Hackett Griffey
Chartered Certified Accountants & Registered Auditors
2 Mill Road, Haverhill, Suffolk, CB9 8BD

Tel (01440) 762024

www.griffey.demon.co.uk

See website for disclaimers
 
S

Sandie

MrHappyChap said:
If I have a stone outhouse (on the land of primary residence) and
convert it to use exclusively for use as an office and business
storehouse, and sometimes customers might be there, then upon sale of
primary residence (including outhouse) then CGT tax would probably be
owed on the outhouse.

If the business is really a small part-time business with not a lot of
profit being made, is it possible that the CGT tax eventually owed on
the stone-barn could actually be greater than the profits made from
the business, and therefore making the whole idea of having the
business rather pointless?
Have you noticed that a lot of people who have home offices keep a fold-up
bed in the room to ensure that it never becomes solely used for business?

Good Luck
Jan
 
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R

Ronald Raygun

Sandie said:
Have you noticed that a lot of people who have home offices keep a fold-up
bed in the room to ensure that it never becomes solely used for business?
It's often the other way round. Trying to make sure the room
really is solely used for business, so that they can claim a
proportion of the house costs (heating, cleaning, insurance,
council tax) as a business expense.

Mostly it isn't what you actually do that matters, it's whether
you claim one thing or t'other. Everyone has to decide for themselves
whether they lose/gain more by saving some ongoing tax but being
clobbered by gains tax when selling, or doing neither.
 

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