Carter Jonas
Carter Jonas

If you own a country estate

Large country estate with over 1000 acres of land
Purchased in 2009 at £27m
Improvements increase value to £30m
Valuation to access value of main house. Smaller amount of land included in sale could reduce the tax to be paid
Complications regarding CGT
imageA country house estate with 15 bedrooms and a gross internal floor area of over 20,000 sq ft plus 8 cottages and over 1000 acres of land, much of which is tenanted farmland. The property was purchased in 2009 at £27m through a company to protect privacy and avoid SDLT. Since then the main house has been repaired and modernised at a cost of £2.5m which has increased the value of the estate as at April 2012 to £30m.

There will be ARPT to pay. A valuation is required to assess the value of the main house. Depending on the amount of land to be included within the dwelling, i.e. 20 acres and only 2 cottages, then the value would be more likely to fall under the £20m threshold, reducing the tax to be paid from £140,000 to £70,000 pa.

Also the house will be subject to CGT on sale, with tax being levied against any increase in value after April 2013. An interesting technical issue therefore arises, as often it is in the tax payer’s interest to argue for as large an area as possible to be included in the “permitted area” for a principle private residence for CGT. However with the advent of ARPT it may be more advantageous to argue for a small as area as possible to reduce ARPT liability, particularly if the value of a property is close to a threshold for ARPT.

Simon PallettFRICS


Simon is a Partner, based in Winchester, who advises clients throughout southern England on a wide range of rural property, valuation and management issues. His expertise includes farm and estate mana...

Read more

01635 263081

Request a RICS valuation