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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
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 2 years ago.
Hi...its agricultural land which I have used to graze horses on for the last 25 yrs
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 2 years 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
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.