Property and CGT

[mulranno]

My husband has been left a 1/3 share in business premises with his siblings by his dad. The premises currently have commercial and residential use. If we were to sell our current home and use the proceeds to buy out the siblings and live in the premises -- would we have any CGT to pay at that time ... or in the future if we were to then subdivide the whole premises (where we would be living) to create a couple of flats which we were to then sell?

You probably wouldn't have any CGT to pay when you sell your current home to buy out the siblings (I'm assuming you've lived in your current home throughout and it's been the main residence for BOTH of you for all that time). This is because of principal private residence (PPR) relief, which allows each couple (or individual if you live alone) to have a main residence and no CGT is payable on the gain on that property.

You might not be able to get PPR on the proportions that are later subdivided and sold as HMRC may take a view that those parts were never part of your PPR in the first place if you can just sell them separately. This, however, is where details of the property and your plans are necessary. Are you planning to occupy the entire premises as your main residence? are you going to be renting some of it out for commercial use? is it even possible to occupy the commercial part as your main residence without applying for change of use from the council? Will you, maybe, leave the commercial part empty until it can be converted to flats and sold?

These are just a few different options I came up with and all of them could have differing CGT implications. Therefore, in this case I would actually recommend you get some tax advice where you can talk to someone face to face. THis person can get all the details from you and would therefore have specific knowledge relating to your situation. Asking a generic question on mumsnet might send you down the wrong road because the people answering you won't have the full details available.