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Agricultural land

Apologies this is not one of my areas and i am going to speak to a specialist but just want a heads up to some of the areas so i can look in to it as well.

Farmer wants to gift chunks of land to son. (Talking millions of pounds in total land)

Would qualify for Agriculural relief for IHT, and also could be a PET.

CGT - Are there any reliefs here? Or is cgt on MV?

SDLT - Is this payable if gifted?  Is consideration deemed as MV?

Are there any VAT implications?

I do not expect free advice here (ie chapter and verse) just some pointers would be great before i speak with specialist.

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Not that complicated

The questions are capable of being answered on the basis of the information that you have supplied and with a few more facts which should be known to you. Initial guidance on the CGT issues can be found on the HMRC helpsheet 295.

If you do not get satisfactory answers from your existing contact or want a second opinion I work as an agricultural tax specialist for IRIS Professional Tax Practice see link at

http://accountancy-practice.iris.co.uk/services/tax_consultancy.aspx

for details of the service and the rates charged. The service can be contacted by telephone on 01865 847474 and you will get an answer the same day.

Michael Blake

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Reliefs

As a very general guide:

Holdover is available for agricultural property (even if the land doesn't already qualify for holdover as a business asset). See here:

http://www.hmrc.gov.uk/manuals/cg4manual/CG66960.htm

SDLT wouldn't normally be payable on a gift of land to an individual - provided there is no consideration (including assumption of a mortgage).

VAT woon't be an issue if the land isn't opted to tax.

Yes - it would be a PET and chargeable if the donor dies within 7 years. Of course, there would be no washing out of the gain on death so IHT would be due and also CGT on the heldover gain if and when the son sells.

This all assumes it is simply an outright gift of land (which definitely qualifies for APR) to the son.

Watch potential issues re APR on the farmhouse if it is retained and the land given away. Given the value involved, it is probably best to get it checked over by a tax specialist before it's done!

Regards

Cathy

[email protected]

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