Disposal of site to child to build house

Stratvs

The CGT relief for parents on giving a site to child to build a house refer to site value, site size and the requirement that the child build their house and occupy it for at least 3 years.

If the site already has derelict residence on which might either be demolished to make way for new house or possibly be renovated/extended to be part of the new house could that put the transfer outside the provisions of this relief? Anything I've looked up all seem to only refer to "green field" sites.

Any pointers or references appreciated.

scheister

somewhere in the back of my head i have a feeling there is a tax case that looks at this question recently but cant put my hand on the case at the moment.

If i recall the case a derelict house will not effect the relief but it must be knock down cant be renovated. Ill post the link if i can find it.

Stratvs

Thanks for that Scheister. The parents could give a green field site or this. Their thinking is might be easier to get planning on this when something already there even if was mostly removed to make way for the new property.

thegolfer

scheister wrote: »

somewhere in the back of my head i have a feeling there is a tax case that looks at this question recently but cant put my hand on the case at the moment.

If i recall the case a derelict house will not effect the relief but it must be knock down cant be renovated. Ill post the link if i can find it.

There is a recent case regarding PPR Relief for a house, denied on the basis of how it was funded, lived in and advertised for sale, reading of that case was that the seller was really developing the house for sale.

Regarding the opening query, it would indicate that the land transferred is to enable to the child to construct a house.

If there is a derelict house already in situ, possibly this might deny the parents the ability to claim the CGT relief.

Possibly an advance opinion from the local district could apply to ensure that the derelict building is sufficiently in a state of disrepair to warrant a rebuild and enable the claiming of CGT.

Stratvs

thegolfer wrote: »

If there is a derelict house already in situ, possibly this might deny the parents the ability to claim the CGT relief.

That was the fear. S603a only refers to "site".

thegolfer wrote: »

Possibly an advance opinion from the local district could apply to ensure that the derelict building is sufficiently in a state of disrepair to warrant a rebuild and enable the claiming of CGT.

Good point. Parents waiting on engineers report on whether it may be part of a future build / rebuild or requires demolition. That may also help clarify.

Calahonda52

Stratvs wrote: »

Good point. Parents waiting on engineers report on whether it may be part of a future build / rebuild or requires demolition. That may also help clarify.

The report will not be enough as you will need planning permission to demolish and you may not get it, notwithstanding the report.