tax

s77

Hiya, can anyone knowledgeable advise....

We have been approached to sell our 27 acre field and are just trying to work out the capital gains implications.  Can someone state what rates CGT are on the sale of land? Are they 10/20% dependant on income tax bracket, as oppose to the residential rates of 18/28 %.

All pointers welcome and many thanks

Jeremy535897

Yes, subject to two further questions:

• is the land used for a business purpose?
• is it part of a larger holding?

I assume it has nothing to do with your main residence.

Jeremy535897

Presumably you apportioned the base cost between the land sold and the remaining land, so you will know the remaining base cost to use? The rate will be 10%/20% not 18%/28%. 

Jeremy535897

If you knew the total cost of the land (12 acres) and the property when you made the first sale, presumably you apportioned a part of that cost to that sale, and what you have to set off against the sale of the 7 acres is the remainder (assuming the land and property were acquired post 31 March 1982 by way of an arm's length transfer)?

It may be that you used the following procedure on the first sale:
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg12731

Jeremy535897

When you prepared the capital gains tax computation for the sale of the house and 5 acres in 2018, you must have apportioned part of the overall cost in 2009 to that transaction, or did you manage to claim main residence relief in respect of all of it? If you did apportion part of the base cost to the earlier sale, the remaining part of the 2009 cost is what you deduct from the proposed sale, not some valuation based on other land sales in the area.