My mother has just moved into what was formally an IP. She has owned it approximately 6 years its quite run down and i have estimated renos to be around 20k to get it up to scratch. She will live there for about 12 to 24 months. I don't have the exact pricing but pretend purchase 150k, value 220k value after renovation 280k.
I said she should get a sworn valuation basically if she sells pay CGT on the increased value from the time it was an ip less the 50% CGT discount, e.g. 220k-150k = 70k less 50% so CGT on 35k. How ever her accountant says it doesn't work like that but didn't seem to explain it to her very well, i have told her to go back and ask for details but i thought i might come to the brains trust here given a lot of accountants understand PAYE group certificates and not really property.
I said she should get a sworn valuation basically if she sells pay CGT on the increased value from the time it was an ip less the 50% CGT discount, e.g. 220k-150k = 70k less 50% so CGT on 35k. How ever her accountant says it doesn't work like that but didn't seem to explain it to her very well, i have told her to go back and ask for details but i thought i might come to the brains trust here given a lot of accountants understand PAYE group certificates and not really property.
