How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4198
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I am selling an inherited farm and wish to reinvest the money

Resolved Question:

I am selling an inherited farm and wish to reinvest the money in a rental property can I do this without incurring C.G.T. and how long have I got to reinvest the money
Regards Charlie
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello Charlie, I am Keith, one of the experts on Just Answer, and pleased to be able to assist you with your question. Here is a summary of the CGT situation form Simmons Gainsford LLP, Chartered Accountants: 'Subject to a period of ownership test, agricultural property has 100 per cent relief in the following cases:In all cases where it is farmed by the owner or let to a third party under a tenancy commencing on or after 1 September 1995.Where let under a tenancy which commenced before that date, if the owner has the right to obtain vacant possession within 12 months.Where it is let under a pre-10 March 1981 tenancy and the old ‘working farmer’ relief introduced in 1975 would have applied.In any other case, the relief is available at only 50 per cent. It should also be noted that agricultural property relief applies only to the pure agricultural value of the land concerned, so that any possible hope value from possible sale for development purposes cannot qualify for agricultural property relief (APR).' So you see it all depends upon when you inherited the farm and what you did with it by way of letting it out as an agricultural tenancy. Also the farmhouse is not included in this exemption unless it was your sole or main domestic residence and from the tenor of your question this was not the case so there will be an element of CGT on the gain relieved by your Annual Exempt Amount of 11.1K or Lettings Relief (LR) up to 40K, but not both. However, you only get LR if you occupied the farmhouse for a time before it was let out. APR is not like Roll Over Relief and there is no reinvestment time limit. Your only problem is your entitlement to the Relief; see above. I do hope that I have shed some light on your situation. It may be necessary to engage a trusted, local professional in this matter to negotiate with HMRC.
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 2 years ago.
Hi Keith
I have owned the farm for 34 years and had it let to a local farmer for that length of time on a yearly basis.I have agreed to sell it to him although the financial transaction has not taken place yet.
I really want to know can I invest the money in a "buy to let" and avoid C.G.T.
The house can be full time let or holiday let.
Regards Charlie
Expert:  bigduckontax replied 2 years ago.
This transaction would appear to be entitled to APR at 100% save for the farmhouse which will incur a liability as I explained. The CGT you will pay on that cannot be rolled over except where the property involved was used for furnished holiday lettings so you might be entitled to this relief. If the farmer occupied the farmhouse, then roll over does not apply.