Urgent help needed please!!!!!!!!!!

Urgent help needed please!!!!!!!!!!

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My client's father is a farmer. He has farmed his freehold land for approximately 40 years. He now wishes to gift some of the farmland to his son. To make ends meet there has been some diversification of activites in recent years. Therefore a small proportion of the land being gifted will not qualify as a business asset but the vast majority will. The son will use the land in his own business. Not as farmland.

I assume that a gift before 5 April attracts taper relief, (in so far as the land qualifies) but if after 5 April a similar gift will not attract entrepeneurial relief. Can readers confirm this?

Secondly, if after taper relief / entrepeneurial relief is taken, some gain still remains, can this be held over in both cases?

Thank you to anyone who can give a prompt reply!
Stormrider

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By User deleted
04th Mar 2008 11:24

Thanks
Thank you Rebecca for finding the time to help me.

Obviously my client does not want the gain held over and i rather suspect that father will!

I have recomended crystalising the taper relief where it is available and then the son could help father to pay any further tax due. Where taper relief is not available the gain should be held over to avoid a large tax bill for father.

It is unlikely that the land under review will be sold on by the son. It is his intention to develop it as his ppr so held over gain may not crstalise anyway?

Best regards

See you next time you are in Plymouth!

David

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Rebecca Benneyworth profile image
By Rebecca Benneyworth
03rd Mar 2008 19:16

Here goes
Treat the disposal as of two different assets for argument's sake.

The "business asset" is BATR before 6 April. No relief for entrepreneurs as it is not the sale of a business or a business termination. Hold over relief available both before and after, but to the extent you hold over the gain, you would not crystallise taper relief. The interaction between these two reliefs is complex. It is likely also to be so with ER.

The "non business asset" attracts non business taper but no other relief is available if it is not used in the business - it is not completely clear from your query but I assume this is what you meant.

I hope this is enough to get you going.

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