mulberry

[mulberry]

Hi,
I am asking if a pal of mine is liable for Capital Aquisition Tax if he sells part of his rear garden to a non-relative, as a site for a house. He inherited the house where he has always resided on the death of his mother four years ago. I'd be grateful for any help.
Mulberry

 

[jpd]

Captial Aquisition Tax is payable on a gift or an inheritence, so selling part of his garden to a third person is certainly outside of it's scope! Presumably, he paid any CAT due on his inheritence of the house when his mother's estate was administered and the house became his four years ago.

If he sells part of his garden, then yes he could be liable to Capital Gains Tax but he would need to get professional advice on this.

 

[woods]

He should consider selling the house and then building in the garden himself. He would avoid CGT this way.

 

[Vanilla]

CAT might be relevant if he availed of certain reliefs on the inheritance- ie the dependant relative relief residing in the dwellinghouse. If he is under 55 and did avail of this relief there could be a partial clawback where he sells within 6 years. He should go to the solicitor or tax advisor who dealt with the inheritance and check.