New queries, issue 4637

Green fingers

Tax treatment of disposal of garden with planning permissions.

I have received conflicting professional advice and should be grateful if readers could clarify the position for me.

My question is whether any planning uplift in the value of the garden of a main home is tax free. One adviser says it is trading and subject to income tax while another says it is tax free.

Additional information is as follows although the numbers are provided by way of example:

• The house has been my only or main residence for more than ten years and continues to be so.
• Let’s assume the house with garden is worth £100 000.
• The garden without planning permission is worth £20 000.
• The garden with planning permission for a bungalow and single-dwelling covenant lifted...