My client disposed of part of the land on his rental property during the year ended 5 April 2015. He received a deposit of £2,500 (option) in the year ended 5 April 2014 and the sale would only complete if planing permission was granted (which it subsequently was). My calculation for CGT is as follows:
Proceeds: £17,500 (£2,500 option plus £15,000 balance)
Selling fees: £755
Cost: £3,383 (£29,000 original cost x £17,500/£150,000, where £17,500 is value of disposal and £150,000 is market value of whole property)
Gain: £13,362
I believe that I could have ignored this gain for CGT and instead reduced the base cost by net proceeds of £16,745 (£17,500-£755). However my client also sold another rental property during the year for £110,000, with a gain of £25,000. Am I right in thinking that the part disposal can not be ignored as the total of all land sales exceed £20k in the tax year?
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indeed 20k total for the year
"Where the transferor has made other disposals of land in the tax year, the total amount or value of the consideration for all such disposals of land must not exceed the limit."