Readers’ forum: What is the rate of CGT on the sale of land?

My clients’ father died about ten years ago leaving a run-down cottage to his three children. Since then the cottage has been flattened and planning permission for two new residential properties has been obtained. The children plan to sell the bare plot and have asked me whether CGT will be payable at the rates applicable to residential property or the CGT rates applying to other disposals. (The transactions in land rules will not apply.)

My initial thought was that land is residential property if at any time in the relevant ownership period it consisted of or included a dwelling so in this case the entire gain will be taxable at the residential CGT rates. However I did some research and discovered TCGA 1992 Sch 1B paras 7 and 8 and HMRC’s manual CG73755 which states that a building is regarded as ceasing to exist...