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CGT & sale of small field of farmland

A smallholder is proposing to sell a field of 1.5 acres. What rates of CGT would apply ?

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HS2 have shown an interest in the field & a price is being discussed.

The smallholder receives a state pension & has minimal income from the smallholding & usually has no income tax liability. She will not be retiring, continuing with the remaining 50 acres.

Will CGT will be charged at the 10%/20% rate?

Thanks

 

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By David Ex
10th Sep 2021 13:41

What does the HMRC guidance/legislation suggest?

EDIT: I suspect that, depending on the amounts involved, other % may also be relevant.

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Replying to David Ex:
Psycho
By Wilson Philips
10th Sep 2021 14:14

You're thinking, I guess, of 0%? ;¬)

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Replying to Wilson Philips:
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By David Ex
10th Sep 2021 14:28

Wilson Philips wrote:

You're thinking, I guess, of 0%? ;¬)

Wasn’t, to be honest. Thank goodness I’m not holding myself out as a tax adviser.

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By RetiredTax
10th Sep 2021 14:21

You don't provide figures and therefore guidance is somewhat difficult, but look at CG Manual para 71870 for starters.
Hope this helps.

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Replying to RetiredTax:
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By The Dullard
10th Sep 2021 14:28

I think CG72200 makes CG7187o irrelevant in these particular circumstances.

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Replying to The Dullard:
Psycho
By Wilson Philips
10th Sep 2021 14:50

Possibly, but "shown an interest" suggests that it is not a compulsory purchase. But if HS2 were entitled to exercise such power, I agree. Then again, the defnition of "small" may be an issue here - it is possible that s243 doesn't apply, but s242 still could.

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By The Dullard
10th Sep 2021 14:25

is the amount she is receiving more or less than what was originally paid for (or the 1982 value of) the whole 51.5 acres?

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By Tax Dragon
13th Sep 2021 11:13

To answer the question I think you think you are asking: 20%.

(Apologies if that wasn't what you meant.)

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Replying to Tax Dragon:
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By Tax Dragon
13th Sep 2021 12:16

Tax Dragon wrote:

(Apologies if that wasn't what you meant.)

I now don't think it was.

I revise my answer to: yes. (Probably.)

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Replying to Tax Dragon:
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By The Dullard
13th Sep 2021 14:19

I was anticipating the £20,000 limit in s 242 being breached, but by my calculation 1.5 is less than 5% of 50. I was also imagining that even if HS2 don't have the power to compel, it is perfectly conceivable that they or somebody else could be authorised to compel, such that the definition in s 243(5) could be argued to be satisfied.

As ever though, we're all putting in more effort than the OP.

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Replying to The Dullard:
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By Tax Dragon
13th Sep 2021 14:50

The Dullard wrote:

As ever though, we're all putting in more effort than the OP.

OPs should be banned from this forum.

(Bit like my job would be easier without clients.)

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Replying to The Dullard:
Psycho
By Wilson Philips
13th Sep 2021 16:45

For the avoidance of doubt, I'm (still) not disagreeing with you. However, whilst 1.5 is certainly less than 5% of 50 (rather, 51.5), what are more relevant are the financial amounts. It could well be that the sum payable for the 1.5 acres is more than 5% of the total value of the 51.5 acres.

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