Tax for Mum

kenshaz

The family are in the process of selling a plot of building land ,50% belongs to my Mum who is 76 years young.What are her options in respect to the sale and how can she reduce the tax burden .

CLAPTON

Presumably there is a capital gain so she will be liable to pay CGT.

The rules are due to change next tax year.

If its sold this year then she will be liable as follows
work out the gross gain (difference in buying and selling price less costs)

then she may get indexation relief and
taper relief depending when she bought it

then she has a CGT allowance of 9,200

after than she will pay tax at either 10, 20, 40% depending upon her income.

If she is married she may give half to her husband and he can use his 9,200 CGT allownace too.

Billionpounddreamer

kenshaz wrote: »

The family are in the process of selling a plot of building land ,50% belongs to my Mum who is 76 years young.What are her options in respect to the sale and how can she reduce the tax burden .

Depending on when she bought the land, your mother could reduce her tax in a number of ways.

However, I would advise getting a tax advisor, as there are many different situations that could result in different tax being paid.
It all depends on whether the land was gifted (and if there was any hold over relief), sold at a lesser price than it's market value at the time, whether it was bought pre-1998, whether it is a business asset or non-business asset (for puroposes of Taper Relief, although I assume non-business with it being land) etc

With limited information, I couldn't give you much information.

Sorry!

Murdina

and just to add to the above, land with development potential can in certain situations be taxed as income, not capital gains, I would echo Billionpounddreamer's advice and suggest she seek a tax adviser. He or she can then look at the particular facts and also perhaps think about any IHT issues, given her age.

kenshaz

The land previously belonged to my Dad ,who died in 1997 ,prior to that it was my Grand-mothers ,it has been in the family for approx 80yrs.
When you say tax adviser ,do you mean an accountant?

morgani

When you say tax adviser ,do you mean an accountant?

An accountant may have knowledge but you would be better with a Tax Technician or certified Tax advisor as they are specifically trained in tax.

http://www.att.org.uk/showarticle.pl?id=219

the bottom pdf link gives details of those registered to practice

http://www.tax.org.uk/

press the find a cta button at the top right