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Readers' forum : Dipping a toe

24 October 2017
Issue: 4621 / Categories: Forum & Feedback

Tax and the availability of reliefs on sale of let residential property.

On 1 January 2014 a client paid £230 000 for a property which consisted of three flats.

After purchasing it at auction he realised that the flat conversions had not been approved by building regulations. He then had to incur costs to obtain the relevant approval. He let out the three flats on 1 January 2016.

During this time he lived in one of the flats for six months and then in another for six months because he had nowhere to live.

On 1 July 2017 he finally sold the property for £300 000. There is also the freehold reversion sale of £15 000 to be considered but this has not yet been completed by the solicitors.

After taking account of the conversion costs I calculate the gain to be £60 000 which ignores the freehold reversion sale.

My question is whether my...

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