Can my ho­tel be a home?

Daily Mail - - Money Mail -

MY WIFE and I sold our small ho­tel last year af­ter 14 years, mak­ing a gross gain of £280,000. As it was our only home, how do we stand with cap­i­tal gains tax?

K.U., by email. YOU need to sep­a­rate out which part of the ho­tel was ex­clu­sively your home and which was ex­clu­sively f or busi­ness, says ac­coun­tant Mike War­bur­ton , from Grant Thorn­ton. On c e you have at­tached a value from ei­ther of these, then the pri­vate res­i­dence part will not be sub­ject to any tax. You will also need to de­cide how much of the game to at­tribute to shared ar­eas of the ho­tel.

The gain f rom the busi­ness part is tax­able at 18 pc above your an­nual ex­emp­tion of £10,100 each. I HAVE an un­paid tax bill of about £5,000. I have of­fered to re­pay £50 a month, but HM Rev­enue & Cus­toms says I have to pay more. Now they want me to do an­other self-as­sess­ment form. Is this right?

R.S., New­port. I AM afraid so. HMRC will al­low you to pay an out­stand­ing tax bill over time — called a ‘ time to pay agree­ment’, but it first needs to know all your in­com­ings and out­go­ings.

This is why it needs a new self-as­sess­ment form. It’s likely you will have to com­pro­mise and pay more than the £50 you have of­fered.

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