We are all aware that Councils are being pushed to find land on which to build houses to achieve Government targets. Maybe you have some land which you are considering selling for development, but have you thought through all your options and considered all the pitfalls?
- Land, when sold, is liable to Capital Gains Tax.
- The value of the land on sale can be affected by ‘hope’ or ‘development’ potential.
- The base cost could be low if agricultural land.
- Are you selling part of your garden? This could be exempt from Capital Gains Tax.
Any planning ideally should always be done ahead of any agreements being made.
- Would you consider gifting the land to your children?
- Consider transferring the land to a trust?
Both of these could ensure that the value of the land is moved outside of your Estate for Inheritance Tax purposes, assuming you survive seven years from the date of the gift.
It can also defer the gain arising on the future sale.
Making informed decisions ahead of transactions can save or defer tax.
If you are in a position where you could be at risk of creating a tax charge on disposal of land, come and speak to our team of experts headed up by Paul Short.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.