Curious question about CGT on land

sheramber

Who set the advertised price?

 Estate agents give the advertised price for a house but the lender can come up with a different price, a surveyor can give a different value again   and it can sell another price altogether. 

What is the value? 

FlorayG

sheramber said:

Who set the advertised price?

 Estate agents give the advertised price for a house but the lender can come up with a different price, a surveyor can give a different value again   and it can sell another price altogether. 

I assume the estate agents. You buy land with cash, not with a mortgage, so 'lenders' and 'surveyors' don't come into it

GDB2222

FlorayG said:

sheramber said:

Who set the advertised price?

 Estate agents give the advertised price for a house but the lender can come up with a different price, a surveyor can give a different value again   and it can sell another price altogether. 

I assume the estate agents. You buy land with cash, not with a mortgage, so 'lenders' and 'surveyors' don't come into it

The estate agents in the area may have a deliberate policy of advertising land at a guide price that is well below its value. One reason might be that it attracts lots of buyers, which makes it easier to sell. 

Or the estate agents may get it wrong, or have got it wrong in the past. Maybe, prices have been rising faster than they realised?

Really, this tells you very little about valuations in the future, and you are extrapolating from the position when you bought the land into the future without any real reason for doing so.

lincroft1710

A few years ago a property auction house used to publish their auction results showing both the pre auction guide price and the price actually achieved. In 90% of the cases the price achieved was way above the guide price

sheramber

FlorayG said:

sheramber said:

Who set the advertised price?

 Estate agents give the advertised price for a house but the lender can come up with a different price, a surveyor can give a different value again   and it can sell another price altogether. 

I assume the estate agents. You buy land with cash, not with a mortgage, so 'lenders' and 'surveyors' don't come into it

A surveyor could be used to give the buyer a value as opposed to a tempting advertised price. 

When computing CGT for selling a property you use the price you paid, not the price it was advertised  at. 

It will be up to your executor to  obtain a value for probate/ inheritance tax.

What that will be in the future nobody knows. 

Rules may be very different then.

No point trying to untangle it at present. 

FlorayG

sheramber said:

FlorayG said:

sheramber said:

Who set the advertised price?

 Estate agents give the advertised price for a house but the lender can come up with a different price, a surveyor can give a different value again   and it can sell another price altogether. 

I assume the estate agents. You buy land with cash, not with a mortgage, so 'lenders' and 'surveyors' don't come into it

A surveyor could be used to give the buyer a value as opposed to a tempting advertised price. 

When computing CGT for selling a property you use the price you paid, not the price it was advertised  at. 

A surveyors' 'value' is meaningless. Land is worth what someone is willing to pay for it. Around here people pay silly money for small acreage. Example; a friend of mine had her field 'valued' last year when she wrote her will. She tells me it was valued at £86k. If she was willing to sell I would happily give her £100k for it and other people, who currently own no land at all, would probably top that

There won't be any 'price paid' if she inherits will there?

sheramber

As previously said  there  will be a value declared for probate/ inheritance tax, whichever is appropriate. 

That will be taken as the acquisition price. 

So, it will be down to your executor. 

There is nothing you will be able to do about it. 
. 

lincroft1710

You are bequeathing your cousin grazing land. If she keeps the land and continues to use it as grazing land, then (at the present time) no tax will be payable by her. If she decides to sell, then that is her prerogative but at the same time she will have to accept she may need to pay CGT (or whatever tax may be in force at the time).

If you are worried that you are leaving your cousin an onerous bequest, then the obvious answer is not to bequeath the land to her.