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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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I'm buying an 11acre field for £95000....which I will

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Hi,
I'm buying an 11acre field for £95000....which I will be getting a 100% mortgage on.....after completion, I will then put up for sale my 7 acre field which was signed over to me 3 yrs ago by my mum..I was buying it off my parents over the last 25yrs at £180 per month..although I don't have proof of this, only a letter my mum wrote to verify it...I've paid around £48000 for it....will I have any capital gains tax to pay when I have sold it? It's worth around £63000.. Thanks..sharon
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello Sharon, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Before I can address this question I need to know is the current 7 acre field agricultural land used for agricultural purposes?
Customer: replied 1 year ago.
Hi...its agricultural land which I have used to graze horses on for the last 25 yrs
Expert:  bigduckontax replied 1 year ago.
The rules in respect of agricultural land are exceedingly complex and as far as I can ascertain rollover relief, which one might expect to apply, is only available if the land is used for a business purpose. If this is so then on sale you would be liable for CGT on the gain made 63K - 40K = 23K less your Annual Exempt Amount (AEA) of 11.1K = 11.9K which would be taxed at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of sale; worst case scenario is a tax bill of some 3.33K plus. However, as I warned, this area of taxation is riddled with problems and the advice of a local, trusted practitioner may be needed. I am so sorry to have to rain on your parade.
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Customer: replied 1 year ago.
Will I have to pay capital gains on the difference I paid for the field, or what my parents paid for it as I can't prove I paid the 48000... My parents paid 19000 for it some yrs ago.x
Expert:  bigduckontax replied 1 year ago.
No, what you paid for it, your parents are liable for the CGT on disposal ie transfer date to you. I see your accountant is doubtful too. It appears that unless you are usisng it as a business you do not hat roll over relief. Thank you for your support.

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