Pointon Young Blog

Most people do not expect to pay capital gains tax when they sell their only or main home, particularly if the property has been their only home for their entire time that they owned it. However, what is less well known is that the exemption places a limit on the amount of garden that falls within the main residence exemption. This may catch out those who sell their main residence and have large gardens or land. What is allowed? The legislation allows grounds up to the ‘permitted area’ to fall within the main residence exemption. This is set at 0.5 of a hectare (1.24 acres). However, a larger area may be allowed where, 'having regard to the size and character of the dwelling’ this is required for the reasonable enjoyment of the property. Case law The case of Phillips v HMRC UKFTT 381 TC concerned the sale of the Phillips’ main residence, which had a garden of 0.94 of a hectare. As it was their main residence, the Phillips did not declare the gain to HMRC. HMRC investigated the disp...

  In July last year, the Government announced a temporary increase in the residential stamp duty land tax (SDLT) threshold to £500,000. The higher threshold applies where completion takes place between 8 July 2020 and 31 March 2021. From 1 April 2021, the threshold will revert to £125,000, with a higher threshold of £300,000 applying to first-time buyers where the price of the property is not more than £500,000. Higher (but different) thresholds also apply in Scotland for land and buildings transactions tax (LBTT) and in Wales for land transaction tax purposes (LTT). These are not discussed here. SDLT supplement A SDLT supplement of 3% applies where a buyer purchases a second or subsequent property for £40,000 or more, such as a buy-to-let property or a holiday home. The supplement does not apply where the buyer sells their main residence and buys a new home, even if they also own other properties. Where the higher residential threshold applies, the 3% supplement applies to the rat...