date of sale for cgt

date of sale for cgt

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A sale of a farm is to be exchanged in february, completion cannot take place until lst July as a farming contract is in operation until then, could we delay the sale date until lst July instead of date of exchange.  Will it cause problems with a february exchange with the farming going on for some time with entrepreneurs relief being claimed.  Urgent answers please.

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By LyneT
05th Feb 2012 18:37

There is not enough info here to decide about whether ER relief is available.  However, the date of disposal for CGT is the date of the exchange of contracts.  So if you exchange in Feb, CGT will be due by 31 Jan 2013. 

CGT will be payable 31 Jan 2014 if you exchange in July.

ER is available if the conditions are satisfied at the date of disposal. 

If you put in a little more detail about the circumstances, then I may be able to tell you whether ER is available at both of these dates.  Sorry I could not be more help.

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By Marion Hayes
05th Feb 2012 19:34

Conditional contracts

I am not sure from your details whether the extinguishment of the tenancy is a condition of the contract. If the farm cannot be sold until the tenancy ceases, and your solicitor confirms that this is because of a 'condition precedent' the effective date of sale will be July.

If you are talking about selling the land which is the subject of the tenancy, you would have to meet the conditions for associated disposals.

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By chancewind
06th Feb 2012 15:11

date of sale

the farm has been owned for 10 years and except for a house and some let properties the bulk of the value is in the land which has been farmed continuously, so there is no problem with ER relief to my knowledge.  My main concern was the long delay before completion whether it would muck up the ER relief.  Thank you Marion I will see what my client can do with the condition precedent.

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