Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Tue, 14 May 2024 12:26:29 GMT by Paul Z Smith
My neighbours and I have a well established right of way / easement over a nearby lane owned by a developer. The developer wishes to alter our right of way, in order to create an entrance to a new estate. After protracted discussions, the developer has offered each household a sum which (I cannot disclose at this stage but) would take us all over our tax free allowances. For each house owner, their houses are their main home. Please advise whether CGT would be payable or would we benefit from Private Residence Relief? If CGT is payable, it obviously affects the true value of the offer from the developer. Thank you.
Posted Wed, 15 May 2024 11:01:58 GMT by figaloprepod falldes
The issue of Capital Gains Tax (CGT) on compensation received for altering an easement can be complex, and it’s important to consider the specific tax laws and regulations that apply to your situation. Generally, compensation received for granting or altering an easement can be subject to CGT, as it is considered a disposal of an asset
Posted Wed, 15 May 2024 11:49:35 GMT by Paul Z Smith
I possibly should have added that the expressed Right of Way being proposed to be altered is in some of the houses title deeds. Other houses rely on a prescribed right of way / easement and the compensation payment is in exchange for a change in title of all houses, to reflect the new proposed route.
Posted Thu, 16 May 2024 15:16:39 GMT by HMRC Admin 20
Hi Paul Z Smith,
Please have a look at CG12945: - Capital Gains Manual CG12945 - Capital sums derived from assets: s22 TCGA92: the charge to tax 
and CG64603: - Capital Gains Manual CG64603 - Private residence relief: gains: deemed disposals.  
We cannot give a definitive answer to the question on this general forum, I would suggest independent financial advice should be sought if there is still any doubt.
Thank you.


You must be signed in to post in this forum.