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‘Ancillary dwellings’ and capital gains tax

Shared from Tax Insider: ‘Ancillary dwellings’ and capital gains tax
By Meg Saksida, February 2022

Meg Saksida explains the definition of ‘ancillary dwellings’ in the context of a recent case. 

Capital gains tax (CGT) principal private residence (PPR) relief gives an extremely valuable exemption for the taxpayer’s main residence. As a part of the ‘main residence’, the taxpayer can include their dwelling house and their garden and grounds.  

The dwelling house itself could be a single building but could also include more than one building, for example a house with a detached garage, a pool house, a glasshouse, a granny flat or another kind of outbuilding or ancillary building. 

Recently, as a result of ‘multiple dwellings relief’ for stamp duty land tax (SDLT) purposes (where SDLT is calculated not on the whole sum of the dwelling house purchased, but on the identifiable parts if there are self-contained elements of the whole main residence), the concept of when separate

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