Clampdown facing homeowners with large grounds with governments new ‘Garden tax’

Those with more than 1.23 acres of land face having to pay a 28 per cent levy on gains on the sale of a home.
large garden tax Clampdown facing homeowners with large grounds with governments new Garden tax
The new stance by tax authorities, reviving the enforcement of rules on the statute book since the 1960s, threatens to upset the long-held assumptions of many that profits from the sale of one’s main home are exempt from tax.

Accountants reportedly said the number of inquiries from HM Revenue and Customs about tax due on gardens had gone up from a couple a year to three a month.

It is feared that the Government could be moving towards a cap on tax-free gains as in America, where only $250,000 of any profit is exempt and homeowners have to prove they have lived there for at least two years.

The emergence of the garden tax clampdown comes ahead of George Osborne’s autumn statement this week. He has come under pressure from Liberal Democrats to bring in a mansion tax on high-value property.

Currently, householders can sell their main residence and grounds free from Capital Gains Tax if the garden is less than half a hectare (1.23 acres).

Even if the grounds are bigger, they can claim full relief if it can be shown that they are “required for the reasonable enjoyment of the house as a residence”.

HMRC denied that it had “launched a campaign to look at private residence relief” but admitted it was checking on transactions using a computer programme called Connect, which enables it to cross-check stamp duty records paid by homebuyers with CGT declarations by sellers.

Gary Heynes, tax partner at Baker Tilly, told the Sunday Times: “Our clients have had to demonstrate the grounds they are claiming for are an integral part of the property with no hedges or streams that separate them from the residence.”

In an example of the application of the rules, a homeowner selling a £2.3 million house in Kent with eight acres might find that HMRC only allows three to be sold free from CGT.

If the other five acres were worth £180,000 of the total price, compared with a value 10 years ago of £60,000, the seller would have to pay tax at 28 per cent on the £120,000 gain – £33,600.

Charles Dickens’s former home gets a £3.1 million revamp and reopens to the public.

The former home of Charles Dickens will reopen to the public today after undergoing a £3.1 million revamp to give the impression that the great author has just “stepped outside”

Charles Dickens House Charles Dickenss former home gets a £3.1 million revamp and reopens to the public.

The Charles Dickens Museum, in Bloomsbury, central London, was the family home of the 19th century genius between 1837 and 1839.

Visitors will be able to tour the house where he wrote Oliver Twist and Nicholas Nickleby and finished writing The Pickwick Papers, stripped as far as possible of modern additions and restored to its original condition.

The Great Expectations project, funded largely through the Heritage Lottery Fund, has also restored neighbouring 49 Doughty Street to include a visitor and learning centre and a cafe, welcoming regular school trips for the first time.

Visitors will be able to tour Dickens’s dining room, complete with place names for famous visitors such as William Macready, the great Shakespearean actor of the time, and to see Dickens’s marriage licence.

His original writing desk and his reading desk, which he designed himself, are among a series of items and documents on display.

The museum includes photographs on display to the public for the first time of the 1865 railway accident in Staplehurst, Kent, in which Dickens was involved.

It will also include costumes from the recent film adaptation of Great Expectations, including Helena Bonham Carter’s Miss Havisham and Ralph Fiennes’s Magwitch costumes.

The redesign, which opens the attic and kitchen of the house for the first time, has transformed the museum, first opened in 1925, from being viewed by visitors as “atmospheric but tired and slightly shabby” to reflecting the house in its original state, director Florian Schweizer said.

The reopening comes in the year that marks the 200th anniversary of the birth of Dickens in Portsmouth, Hampshire.