Readers' forum: Annexation

My clients’ house has a large garden and they think planning permission could be obtained for another property.

Although they do not need medical or nursing care the husband’s elderly parents need assistance and have suggested that they sell their house and use the funds to build a self-contained ‘granny annexe’ in the garden. The clients have asked for tax advice and I should be grateful for readers’ thoughts.

Could some main residence relief be lost and what about aspects such as the pre-owned assets tax and gifts with reservation of benefit? Is there any easy way of implementing this plan?

I would be grateful for general advice here.

Query 19 390– Gramps.

Reply by ANA

Is the annexe part of the main house or a separate property?

Gramps needs to determine who owns the annexe. If it is the parents there is a disposal (or lease) of the client’s land which takes place...