View the article online at http://citywire.co.uk/new-model-adviser/article/a639360
Forget mansion tax…..get ready for garden tax
by Alex Steger on Dec 03, 2012 at 10:48
The Liberal Democrat’s plans for a mansion tax may have been vetoed by David Cameron, but property size still matters as HM Revenue & Customs is looking to levy more tax against homeowners with big gardens.
According to the Sunday Times the taxman is dusting off an obscure rule which has been in the statute book since the 1960s and would see it charge Capital Gains Tax (CGT) on the sale of land above one and a quarter acres, around the size of a football pitch.
Currently homeowners can sell their main residence and its grounds free from CGT where the garden is less than 1.23 acres.
Where grounds are bigger full relief can still be claimed where owners can show the grounds are required for ‘the reasonable enjoyment of the house as a resident’.
HMRC confirmed to the Sunday Times that it was making it harder to claim above the limit by cross checking stamp duty records paid by most homes owners with CGT declarations by sellers.
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