Capital gains tax rates on land with permission and history of use for a residential caravan

Based on the facts below (for which evidence can be provided), please could you confirm the CGT rates payable (10%/20% or 18%/24%) following the transfer of land from father to son. • The freehold land to be transferred is 1.2 acres of grassland with wooded area, formerly used for grazing/hay making. The land is accessed via an unmade track and does not form part of a dwelling's garden or grounds. The corner of the plot has been used for the stationing of a caravan/mobile home for many years and benefits from an electricity and water supply. Planning permission for a residential caravan, restricted to a 300 square metre corner of the land, was granted in 1999. • The current owner purchased the land for £10K in the 1990s and has rented out a one bedroom caravan/mobile home to different tenants for most of the period of ownership. As confirmed by satellite images, different second hand caravans/mobile homes have been used for this purpose over time. The wasted remnants of the past two are visible on site. The caravans/mobile homes used for this purpose have all been a small, 1 bedroom, moveable caravan/mobile home. • As can be evidenced, the last tenant to live in a caravan at the site had to be evicted by court order in 2022 as the caravan/mobile home had reached the end of its lifespan and it was no longer possible to repair the damp and rot in the floor and ceiling. There is no value to this derelict chattel and the plot is being valued as bare land with permission for a caravan. A RICS evaluation is being obtained. • As can be evidenced, there is nothing on the plot of value. There is no landscaping/garden features nor concrete hard standing to affix a caravan/mobile home to. There has been no improvement made to the land since the current owner purchased it (as evidenced via historic satellite images) and no qualifying expenditure that can be deducted for capital gains tax. To summarise, the consideration is 1.2 acres grassland/wooded area of land. The corner of the plot has planning permission for a residential caravan restricted to less than 6.5% of the entire area of the plot. The corner of the plot has been rented together with a chattel caravan/mobile home, to various tenants during the current period of ownership. We understand that stamp duty would be payable at the non-residential rate where applicable. However, as the corner of the plot has been used during the period of ownership for the stationing of a residential caravan, we need to check whether or not it is correct to apply the non-residential rates for capital gains tax calculation purposes. Thank you.

Hi 

Please refer to  CG73550 which clarifies what is a ‘Residential’ gain.
Where the land consisted or included a residential dwelling (which this did/does) then it is classed as residential and would be taxed accordingly.
Land that at any time is, or is intended to be, occupied or enjoyed with a dwelling as garden or grounds is taken to be part of that dwelling and so would also be subject to the residential rate on CGT.


Thank you