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Sam
Sam, Accountant
Category: Tax
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We wish to obtain entrepreneurs relief on the sale of our farm

Resolved Question:

We wish to obtain entrepreneurs relief on the sale of our farm land but must not be seen to farm the land after the land becomes unconditional. However, it may be several weeks or months after the completion that we are able to sell our crop as this completion becomes immediately after we harvest. From a tax point of view is there any way around this ?
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi Thanks for your question I am Sam and I am one of the UK tax experts here on Just Answer. This is not an uncommon problems and the simplest solution would be for the exchange and completion all to take place on the harvesting of the land thereby not jeopardising entrepreneurs relief. However I appreciate this may not be viable and therefore I advsie that Another option would it be viable for you to pay rent for the continued use of the land to cover the time between the sale and the harvest - Sadly the continued use of the land at things stand will see the loss of entrepreneurs relief Let me know if I can assist further Thanks Sam
Customer: replied 1 year ago.
Sam, we entering into a contract to sell the land on August 31th when it becomes unconditional. The barley harvest should be in mid August when the grain will be taken of the land for sale to a grain merchant later. Does this complicate the winding up of the farming business ?
Expert:  Sam replied 1 year ago.
HI Thanks for your responseIts means that you cannot have entrepreneurs relief unless you action the advsie given - you advsie that the unconditional contract will be in place before the land has been harvested (so at the exchange of contracts rather than completion) So either both of these events have to take place after you have harvested OR you pay rent for the duration in the middle as recognition of the land then belong to the new owners and instruct your conveyancer to build this into the contract.Thanks Sam
Customer: replied 1 year ago.
Sam, the grain (crop) will be off the land before the contract becomes unconditional, however, my point is that the grain (crop) will not necessarily be sold eg end of September. How does this possible later grain sale affect the ER with HMRC?
Expert:  Sam replied 1 year ago.
This is merely semantics - it will not affect the entitlement to the relief - although the following examples refer to animals the principle is the same http://www.hmrc.gov.uk/manuals/cgmanual/cg64020.htm Make sure you refer this legislation to your acting accountant. Thanks Sam
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