Rollover relief where owner not a trader

Rollover relief where owner not a trader

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Sole trader farmer sells old farm owned by himself and purchases new farm owned by self and wife within rollover time limits. Wife is not a trader. Can gain on old farmhouse and farmland be rolled over into new farmhouse and farmland. New farm etc probably held as joint tenants rather than tenants in common. Gains on trader's old assets are less than half cost of joint new assets
George

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By User deleted
27th Oct 2005 12:49

Thanks for the helpful replies. Much appreciated

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By jamesbailey
25th Oct 2005 12:34

Rollover Relief
Husbands and wives are treated as separate persons for CGT rollover, so your farmer can only roll over the gain on his old farm into his share of the new one.

If the new farm is owned jointly with his wife, then half of the cost of acquiring it will be available to relieve the gain on the old one.

You say the gain was less than half the cost of the new farm, but the question is the sale proceeds of the old farm. If these represent more than half the cost of the new one, there is likely to be some restriction of relief.

With hindsight it would have been better for the farmer to have bought the new farm in his sole name, thus enabling him to roll over the gain against the full cost of the new farm. He could subsequently have (for example) taken his wife into partnership with no CGT cost.

James Bailey
Chartered Tax Adviser
[email protected]
01822 810169

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