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, Accountant
Category: Tax
Satisfied Customers: 4959
Type Your Tax Question Here...
bigduckontax is online now

I am a farmer in essex. I am in negotiations to grant

This answer was rated:

I am a farmer in essex. I am in negotiations to grant a right of way for 400 metres across my land to an adjoining property. The right of way would be for three years. It will be used to transport soil by trucks. As it stands at the moment £25000 would be paid to me on submission of planning whether it is successful or not and then stage payments totaling £200000.
I wish to mitigate tax as much as possible.
A number of question occur to me.
1 how will this be treated for tax. Is it income or a capital gain.
2. Presumably spreading the payments over three years would be more tax efficient.
3. should wording of a contract be framed in any certain way.
4. should I transfer the land into joint ownership of my wife and or family first.
I am 52 years of age, married with four children, 13,12,5,5.
The farm is in my sole name and probably worth £2.5m. I have owned it outright for 11 years and as a 3 way partnership before that. My income is approx £28,000 and my wife's is around £15,000.
Are you able to advise me on this matter.
Hello Peter, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. This would be income, akin to a rent. Indeed, if paid in three tranches properly planned in different tax years would definitely be to your advantage in mitigating Income Tax (IT). Preferably to set out the dates the fees for access are due. However the full wording is a matter for a solicitor as there are several matters to be taken into consideration, not the least reinstatement comes to mind. If you did the transfer proposed then the fee for access would be split equally reducing your exposure to IT. I do hope that my reply has been of assistance.
bigduckontax and other Tax Specialists are ready to help you
Thank you for your excellent support.