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TonyTax
TonyTax, Tax Consultant
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, I sold my farm house (not a working farm) 2 years ago but

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Hi, I sold my farm house (not a working farm) 2 years ago but have just sold a field which I owned and was attached to my house. Do I have to pay any Capital Gains Tax. I am now retired on a low pension upon which I do not pay tax. The field was in both mine and my wife name. She is on low, non taxable income.
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

I'm afraid that you may have to pay Capital Gains Tax as you sold the field after you sold your home. See page 7 of HS283 here. You may have had to pay CGT in any event depending on the size of the plot of land you owned including that on which the house was built, the garden area, the drive and the field.

If you paid for the field separately from the house, then the base cost that you use to work out the gain will be known to you. If the farm house and the field were bought at a combined price, then you will probably need to consult a land agent to split the price paid between the farm house and the field.

The first £22,000 of your gain will be tax free, £11,000 for each of yourself and your wife. There are two rates of CGT, 18% and 28%. The rate or combination of rates that you will pay will be dependent on the level of your respective incomes in the tax year you sell the property. One of the following scenarios will apply:

1 If your income in 2014/15 including the net taxable gain is £41,865 or less, then all the taxable gain will be charged to CGT at 18%.

2 If your income in 2014/15 excluding the net taxable gain is £41,865 or more, then all the taxable gain will be charged to CGT at 28%.

3 If your income in 2014/15 excluding the net taxable gain is £41,865 or less but more than £41,865 when you add the net taxable gain, then part of the net taxable gain will be charged to CGT at 18% and part at 28%.

I hope this helps but let me know if you have any further questions.
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