Taxation of Chargeable Gains Act 1992 Schedule 1B paragraph 7

Disposal of a building that has undergone works

Schedule 1B paragraph 7 deals with how a building's suitability as a dwelling is assessed for capital gains purposes when works have been carried out that cause the building to cease to exist or become unsuitable as a dwelling before or at the point of disposal.

• Where works cause a building to cease to exist or become unsuitable as a dwelling by the time of disposal, the building is treated as unsuitable for use as a dwelling throughout the entire works period.
• The works must be "qualifying works", meaning any required planning permission or development consent has been granted and the works have been carried out in accordance with that permission or consent.
• The "works period" covers both the time the works were in progress and any immediately preceding period when the building was not used as a dwelling for reasons connected with the works — but it excludes any time when unauthorised work, use, or a breach of planning conditions occurred.
• If the works are not qualifying works at the time of disposal (for example, because planning permission was never obtained), the works are disregarded entirely and the building is treated as though its suitability as a dwelling was never affected.