Capital Gains Tax and sale of bequeathed land
Discussion
Long story short - my aunt dies last July and left me some land that I never thought about until a local business came to see me. Still not sure how they found me but they want to extend their business and the only place to do this is into my 3.5 acre field (part of a larger farm). I called a local property company who do valuations and they reckon to sell all 3.5 acres should be valued at around £350,000. Is this subject to Short term CGT? If I use the money to buy a house can I offset the CGT? The land was farmed and of course the would be buyer will need to check planning permission too.
You own some land.
Your name and address is registered at the land registry as owner of that land.
Anyone can find out the identity of the owner by asking for a "map search" at the land registry.
£350,000 for 3.5 acres is, obviously, £100,000 per acre. I doubt they're planning to graze sheep on it....
Presumably they want to build on the land, so you need to engage an agent/valuer to tell you the true open market value of the land, with or without planning permission. Otherwise you're at risk of selling land worth £500,000 for a bargain basement £350,000....
Yes, if/when you sell you will definitely have a CGT liability. You need an accountant as well.
Your name and address is registered at the land registry as owner of that land.
Anyone can find out the identity of the owner by asking for a "map search" at the land registry.
£350,000 for 3.5 acres is, obviously, £100,000 per acre. I doubt they're planning to graze sheep on it....
Presumably they want to build on the land, so you need to engage an agent/valuer to tell you the true open market value of the land, with or without planning permission. Otherwise you're at risk of selling land worth £500,000 for a bargain basement £350,000....
Yes, if/when you sell you will definitely have a CGT liability. You need an accountant as well.
JPJPJP said:
If the land is actively farmed, am I right in thinking it could qualify for entrepreneurs relief?
I believe that can be the case if it's effectively a "business" that's sold as opposed to just "land". Definitely IMO a question that would require specialist advice and even then may be the subject of debate with HMRC. There would be, amongst other things, the requirement to show it's genuinely a business and with a minimum period of ownership. Gassing Station | Finance | Top of Page | What's New | My Stuff