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Readers' Forum
Replies to Queries — 4
Post office problem
Readers' Forum
Replies to Queries — 4
Post office problem
Some years ago my clients (husband and wife) purchased a local post office and shop with adjoining residential accommodation. They have traded in partnership (the wife is the postmistress) and the residential accommodation has been their sole private residence. On purchase, there was an agreed apportionment of the price between property, goodwill and equipment, but the amount allocated to property was not divided between business and residential. The residential accommodation stands on its own site and, although it adjoins the post office and shop, there is no internal access between the two.
It is proposed to sell, and the question arises (with taper relief in mind) whether this is the sale of one mixed use asset or two distinct assets — in other words, would there need to be an apportionment under paragraph 9 of Schedule 1A to the Taxation of Chargeable Gains Act 1992?
Are there any steps that could be taken to secure full business asset taper relief — e.g. agree a separate sale price for the residence, split the deeds, etc?
This must be a common situation with mixed use properties (e.g. farms, shops, etc.). Are there any general rules that can be applied to establish whether one asset or two separate assets are being disposed of?
(Query T16,439)
