CGT minefield on inherited family farm?

by Readers Question

9:42 AM, 19th October 2020
About a month ago

CGT minefield on inherited family farm?

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CGT minefield on inherited family farm?

Can anyone advise me on the following CGT issue please? My father died in 1994 leaving my brothers and me the small family farm, but in a will trust allowing my step-mother to remain living there and receive any income from it.

The land has been let to a neighbouring farmer since 1996 and was transferred to us in 2006. CGT was paid at the time. The farmhouse remains in the trust and this year my step-mother died. We are about to sell the whole property for development this year (or early next year) with substantial capital gain.

What rates of CGT are likely to be applicable?
Would it be classed as a business and eligible for Business Asset Disposal Relief?
Could I/we claim roll-over relief if we bought another business with the proceeds?

Any help or suggestions will be appreciated.

Phil


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Comments

Graham Bowcock

10:20 AM, 19th October 2020
About a month ago

Hi Phil

I get involved with such issues as a rural chartered surveyor, dealing with building options and promotion agreements.

The question you ask is very complex and I respectfully suggest that any answer on a forum such as this will not be adequate.

I hope that you used an agent to set the development deal up, but they should have steered you to an apropriate accountant before now. It is possible to mitigate (but not necessarily avoid) tax on development sales but planning has to start very early in the process.

If you do not know a specialist agricultural accountant, I can suggest a couple. I am easy enough to find if you want to have a quick word about this first of all.

Graham Bowcock

Chris Bradley

10:06 AM, 24th October 2020
About a month ago

Wouldn't this be a life interest trust created in the will of the husband dying. When the life tenant dies, the house becomes part of the estate of the life tenant and IHT is paid on its value at that date, less allowances etc. The beneficiaries would then. Not pay cgt unless they kept the property for a number of years before selling, and then cgt would be the difference between value on inherited, and sale value


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