Ive heard that the Internal Revenue/ Inland Revenue tax XE “taxes” the profits in a home-office under Capital Gains Tax XE “Capital Gains Tax” regulations when you sell your house. Is this true?
A15. YES and NO. Capital Gains Tax XE “Capital Gains Tax” (CGT XE “CGT” ) theoretically applies to the part of a house that has been successfully claimed (see Q14 above) as an office for income tax relief purposes. But for all practical purposes the CGT is not usually levied as the CGT assessment requires exclusive use of the space. This is unlikely to apply to COMPANY teleworkers. CGT XE “CGT” Note: Few home-workers claim exclusive use. In the exceptional circumstances where an assessment is raised, Roll-Over-Relief can carry CGT tax forward to the next home and so on but only if the space is formally recognised by the Inland Revenue as a business-asset. Where/If an assessment is raised it will be on a Time and Space used formula (the office as a proportion of the space in the house for a period of months as a proportion of the time owned). Where an assessment becomes a CGT bill to be paid, the owners of the house can first claim their annual CGT exemption/s (about 6,000 CGT profit ea
