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CGT on right of way

CGT on right of way

I have a right of way over two neighbouring properties which have recently been bought by two property developers.

The developers have approached me about giving up the right of way in exchange for building a garage and possibly giving me some of their land. There will be no cash involved.

I am in the process of getting some external help re valuations of the proposed exchange. I will only deal if I can be reasonably satisfied that the exchange is roughly equal in value terms.

Will such a swap be treated as a gain for CGT purposes?

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20th Dec 2012 16:56

Looking at the facts you are

 

i. Giving up the right of way

 

ii. In return, getting a garage built plus some land.

 

I conclude that there will be a CGT gain.

The proceeds will be the value of what is received i.e the garage and land.

 

The cost will be the cost of the asset you are disposing of i.e the right of way.

 

How much did you pay (if anything) for the right of way, and how long did it last for? When was it granted to you?

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