Troubling CGT Issue

stateless

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CLAPTON

how much is involved?

stateless

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redmower3

Whilst I would not wish stress upon anybody I find it difficult to reconcile the phrases "he has limited funds" with "he sold a plot for £150k"

If only my funds were that limited

Rolo_Tomasi

In order to give an indication of any CGT we would need to know the date of purchase and cost of each plot of land.

What I would say now is that the best advice has to be to come clean to the Revenue about each transaction. As your father has never informed the Revenue about the first sale, they did not have the information required to make an assessment of any tax due. In these circumstances the time limits advised to you do not apply.

If you do not tell them now and they later find out the penalty will be much more severe. Penalties can be up to 100% of any tax loss and although I do not think they will be this severe at the moment, if he does not inform them about the original sale and they later find out I don't think there will be any argument against a 100% penalty.

stateless

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redmower3

@stateless I am pleased, perhaps even relieved that you took my remarks in good spirit.

I would suggest that your father is doing the right thing by seeing an accountant (not so sure of the need for a solicitor at this stage).

Be mindful that this is a tax on a gain not on the whole £150k.

It is ages since I had to pay CGT and I know that the rules have moved on but I believe that the underlying principle remains.

So to calculate the actual gain you would need to take into account the original purchase price including the associated costs.

Then I would imagine that costs of owning the land...fencing, maintenance etc would also offset the gain as would any costs of disposal.

Therefore the actual gain could be significantly less than the actual selling price, plus your father would also have a CGT allowance further reducing any liability.

The other plot of land was disposed of in a different tax year...so another CGT allowance to use.

Anyhow...let your accountant sort it. I hope it all woks out ok for you

cheers

Mick

stateless

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