I own and live in a house with a large garden. I am applying for planning permission for three houses to be built in the garden. If I sell the whole lot to a builder, do I have to pay capital gains tax (CGT) and if so how much, and what can I offset? Is there any income tax to pay too?

Arthur Weller replies:
If you currently use the garden as part of the use of the house, and it is not separated from the house and the whole area is not more than half a hectare, principal private residence relief should be available to you to exempt you from any CGT – see HMRC’s Capital Gains manual at: www.gov.uk/hmrc-internal-manuals/capitalgains-manual/cg64350p. The fact that you are applying for planning permission should not affect this – see HMRC’s guidance at cg65243.