Capital Gains Tax and planning permission?

[CanIAskAnotherStupidQuestion]

I wasn’t sure whether to put in Property, Legal, or Money topic 😳

I am hoping for words of wisdom as to capital gains tax in this scenario (or where to find advice quickly).

Our house (only/main residence) has some land with the property. We have successfully applied for planning permission on this land. Permission is agreed subject to some legal documents being signed with the council. We have correspondence with the council saying that planning will be approved. However it is not yet in approved status until documents are signed.

We are selling the house.

Solicitor has done all the necessary things to make sure the land will be separate to the house at the point it sells and will end up as separate titles.

We will also be selling the land (a few months later than selling the house).

The intention was that we would have the planning permission on the land before the house sold. Reason for this being that it’s always been my understanding that there is no capital gains tax on the increase in value of your main residence. So if planning was granted while the whole thing was our main residence then no capital gains.

But I think that if the land is not part of main residence (ie after the house sells), and then it gets planning permission when the paperwork is signed, the uplift in value is then subject to capital gains.

Can anyone advise if that is the case?

To further complicate things, the paperwork will be signed on the same day as the house sale goes through, but the house sale will definitely be the first transaction.

You need to sell the land first for there to be no CGT. You sell the land after the property then no PPR relief.

I feared this might be the case. I can’t believe it didn’t occur to me that this might have changed in the many years it has taken for us to actually get the planning permission.

So there is no relief at all? Is the CGT charged on the full sale price of the land, or can we offset the costs it took to get the permission (surveys, professional fees etc)?

I just found this but in the guidance.

“Even if you meet all of these conditions, you will not get Private Residence Relief if you:
dispose of all or part of your garden after you have disposed of your home“

Sales proceeds less original cost less planning costs, fees etc.

You know it will be at the higher rates of 18%/28% and not 10%20%?

Yeah bummer, CGT has just had a massive hike too.

I don't think this has changed, it has always been the case AFAIK. We first got planning on our garden over 15 years ago and that was the law at the time.

We are finally selling, but all at once. We have been advised to put a covenant on the actual house as it would retain a massive garden. If a developer decided to knock down our house and build 4 new houses we would get a share of the increased value.

Thanks all! I’m going to need specific IRL advice aren’t I? What kind of professional should I be looking for to give that advice?