Avoiding tax when converting a property into two dwellings?

View All Questions View Questions From:

Avoiding tax when converting a property into two dwellings?

Question
We have lived in our house for 35 yrs, my mother and I. I have converted the house into 2 dwellings and intend to have separate Leases on them. Will we be liable for CGT at any time? If so what is the best way to avoid this?

Arthur Says:

This question is not very clear, so I need to make some assumptions. I assume that the mother owned the whole house until they decided to split the house in two, at which point she transferred ownership of half of it to the child.

If so, there will be no capital gains tax liability, because principal private residence relief will be available on both halves of the house. The mother owned the whole house until the split, and lived in it. She owned and lived in her half after the split. The child owned and lived in their half after the split. So the conditions for the relief have been complied with and there will be no tax due.

About Arthur Weller

Over 350 consultations successfully completed by Arthur though this site!
Arthur Weller is a Chartered Tax Advisor (CTA) and an integral part of the Property Tax Portal team. He offers a special rate tax advisory service on any aspect of UK taxation, including property taxation, for as little as £97 for a 30 minute telephone tax consultation.

Key Facts:

- Over 90% of queries are answered within 30 minutes and within 3 days!
- Over 300 consultations done by Arthur through this website!
- You pay for the advice after it has been given

Here is what one of our customers had to say:

“Arthur contacted me the next day.  He phoned promptly and offered me clear and concise advice which he referenced to the HMRC website, taking me through section by section and explaining the implications each step of the way. 

He also sent me an MP3 recording of the session so that I was able to absorb the information more fully.  I am extremely impressed by his professionalism. Money very well invested as his advice will save me thousands of pounds.  I wholeheartedly recommend his services.

Thank you very much.” V. Loughery


To learn more about this service click here.

Ask a Question