Q&As

An individual P, builds a house, Property B in the grounds (the permitted area) of the house, Property A, in which P is living. P sells Property B without ever having lived in it. Is the arising gain a capital gain taxable under the Taxation of Chargeable Gains Act 1992, or a trading profit under section 517C of the Income Tax Act 2007?

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Published on LexisPSL on 01/06/2020

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • An individual P, builds a house, Property B in the grounds (the permitted area) of the house, Property A, in which P is living. P sells Property B without ever having lived in it. Is the arising gain a capital gain taxable under the Taxation of Chargeable Gains Act 1992, or a trading profit under section 517C of the Income Tax Act 2007?

We have assumed that: An individual P, builds a house, Property B in the grounds (the permitted area) of the house, Property A, in which P is living. P sells Property B without ever having lived in it.

For further information see Q&As:

  1. If an individual builds a property (Property B) in the grounds (the permitted area) of the house in which they live (Property A) and then sell Property B, will Property B qualify for PPR relief? How would the capital gain be calculated? If instead the individual moves from Property A into Property B, demolishes Property A and builds a new home in its place (Property C) and sells Property C, will Property C qualify for PPR relief? How would the capital gains be calculated? What if the individual moved into Property C and sold Property B instead (having lived in it whil

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