Are You Planning To Sell Development Land?
If so, are you sure you will be able to claim all available business reliefs?
For farmers, entrepreneurs’ relief, which effectively reduces capital gains tax to 10%, may be more useful than the alternative rollover relief.
Anyone considering a sale of development land should plan carefully for that sale in order to ensure that entrepreneurs’ relief will be available. This was highlighted in a recent First-tier Tribunal decision – Jeremy Rice v HMRC where it was held that a significant change in a business was a cessation of one trade and the start of another, thus ensuring that the valuable reliefs were available.
There are ways to bring about a cessation of trade, particularly with partnerships, but careful planning and tax advice should be sought as soon as there is even the possibility of such a sale. With Development land sales increasing, the value of good tax planning and advice cannot be underestimated. At Green & Co we have helped a number of businesses maximise their reliefs on sales of both land and trades. Please do contact us should you require help or further advice.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.