Sale of commercial let/purchase of residential- rollover?

[inform]

Hello

I own a commercial property jointly with my brother which we lease out. We are thinking about selling the freehold which means the money will be equally divided. Can anyone give any advice or point me in the right direction as to what options are open to me and pitfalls to look out for regarding Tax or other implications that would reduce my investment including CGT. I am a retired person and don't want the hastle of tenants anymore but want to protect my assets. Any advise would be good. thank you

[Tax Accountant]

Hello

I own a commercial property jointly with my brother which we lease out. We are thinking about selling the freehold which means the money will be equally divided. Can anyone give any advice or point me in the right direction as to what options are open to me and pitfalls to look out for regarding Tax or other implications that would reduce my investment including CGT. I am a retired person and don't want the hastle of tenants anymore but want to protect my assets. Any advise would be good. thank you

On the one hand you say that you want to protect your assets. On the other hand you say that you want to sell your asset, the commercial property.

Your question could be interpreted in two ways:

(1) Is it a good decision to sell the property?

ANSWER: Not enough information for someone to give a meaningful reply.

I would normally wish to keep hold of the property, especially as it is a commercial property and therefore there is less hassle with the tenants. You can always give it to agents to manage.

Also, you enjoy the income as well as benefit from any future increase in value.

If you don't need the money for other use, I would prefer to keep it.



(2) If you sell, what are the tax implications?

You may benefit from Business Asset Taper Relief but it is necessary to look at the use of the property and the tenant's business structure since April 1998.

If you sell, there may be CGT to pay.

On the other hand, if you keep it, all CGT is wiped off at death. IHT applies at death depending on the total value of your estate.

Ramnik

[inform]

Sorry to confuse.

1. we (brothers)sell the commercial premises (no tenant involved)
2. I buy a residential property to let.

Are there likely to be any tax implications if I roll over the investment from a commercial to residential premises.

Thank you

[Tax Accountant]

Sorry to confuse.

1. we (brothers)sell the commercial premises (no tenant involved)
2. I buy a residential property to let.

Are there likely to be any tax implications if I roll over the investment from a commercial to residential premises.

Thank you

You are most likely not able to roll over any Capital Gains on sale of commercial property into the purchase of a residential investment property for letting.

This will mean that you may face a Capital Gains Tax liability on sale of the commercial property.

Ramnik