Selling a Solar Farm - CGT Question

[Bungee123]

I know this is a question for our accountant but can anyone help me out with this please. If a farm is passed down a generation following death and farmed by the son, then covered in solar panels, if we then choose to sell up and buy another farm will the CGT be calculated from the original purchase price before being passed down or the value at the parents date of death? Obviously no IHT was paid as both father and son were/are farmers but due to the farm being industrialised with solar panels we are presuming that CGT will now be payable on at least the gain in value from the panels. TIA

 

[midlandslad]

Has a third party installed panels and rent from you?

 

[Bungee123]

Has a third party installed panels and rent from you?

Correct

 

[Punch]

CGT reset on death. So only CG since probate will be liable.
Something that I think will be most likely at threat in budget.

 

[Bungee123]

CGT reset on death. So only CG since probate will be liable.
Something that I think will be most likely at threat in budget.

Thank you

 

[serf]

As above CGT reset at death. , ( as the rules stand at minute )

 

[midlandslad]

If buying another farm there is potential to rollover the capital gain, however this will be impacted by your period of ownership and how long you have actively farmed the land v let the land out.

 

[Grass And Grain]

If buying another farm there is potential to rollover the capital gain, however this will be impacted by your period of ownership and how long you have actively farmed the land v let the land out.

Can you rollover capital gain on an investment asset (i.e. let solar farm)? You can on farmland if a trading farming business.

 

[Fogg]

My understanding of this is scant, but aren't you allowed your first £million of CGT to be charged at 10% in business? The former Entrepreneur's Relief. I can't imaging the panels would have gained in value, so I struggle to see how CGT would be much of an issue?

Given their purchase would have likely been offset against tax in entirety on purchase, capital allownaces claimed in full, then anything they're sold for would effectively be treated as earnings from a tax perspective?

 

[Bungee123]

My understanding of this is scant, but aren't you allowed your first £million of CGT to be charged at 10% in business? The former Entrepreneur's Relief. I can't imaging the panels would have gained in value, so I struggle to see how CGT would be much of an issue?

Given their purchase would have likely been offset against tax in entirety on purchase, capital allownaces claimed in full, then anything they're sold for would effectively be treated as earnings from a tax perspective?

Thanks for your answer. The land is being let out to the solar developers/builders so no investment ourselves. I believe from another question on tff that the value were we to sell it is roughly 20 times the first months rent + the original value of the land (if you choose to sell the land with the panels). Therefore on 500 acres it is quite a significant amount!

 

[Bungee123]

Can you rollover capital gain on an investment asset (i.e. let solar farm)? You can on farmland if a trading farming business.

We believe it couldn't be rolled over to purchase another farm although this may be incorrect. We intend to stay in farming

 

[steveR]

We believe it couldn't be rolled over to purchase another farm although this may be incorrect. We intend to stay in farming

This question would need asking of a really good Tax specialist.

I was told a few years back, that it would be possible to Roll over, but my question at the time was pure speculation. I was pondering selling the Lease versus selling the whole lot as part of a big change around.

Still here though

 

[Bungee123]

This question would need asking of a really good Tax specialist.

I was told a few years back, that it would be possible to Roll over, but my question at the time was pure speculation. I was pondering selling the Lease versus selling the whole lot as part of a big change around.

Still here though

We're still at the pondering stage, want to keep farming but don't fancy paying 45% tax on farming profit

 

[Grass And Grain]

I was led to believe you couldn't rollover a capital gain if it was let for solar..Could well be wrong though. I might be getting muddled up between capital gain Rollover relief and simply a capital gain if you'd gifted to next generation (so you couldn't defer the capital gain, like you might do when passing farmland to next generation that you're using in your trading business).

Not sure, but think our accountant said it couldn't be rolled over if you were landlord of solar.

 

[Bungee123]

I was led to believe you couldn't rollover a capital gain if it was let for solar..Could well be wrong though. I might be getting muddled up between capital gain Rollover relief and simply a capital gain if you'd gifted to next generation (so you couldn't defer the capital gain, like you might do when passing farmland to next generation that you're using in your trading business).

Not sure, but think our accountant said it couldn't be rolled over if you were landlord of solar.

I've heard somewhere (possibly from our accountant!) that the sale of the land can be rolled over but not the sale of the solar panel lease (which sounds feasible)

 

[Grass And Grain]

I've heard somewhere (possibly from our accountant!) that the sale of the land can be rolled over but not the sale of the solar panel lease (which sounds feasible)

Sounds feasible. I'm guessing with housing, the sale goes through before the houses get built, so you can roll it over. Different situation with solar because developer usually wants to rent the land. Maybe OK if you find a buyer before you sign the solar lease.

Will be interesting if anyone has a definitive answer.

 

[steveR]

Sounds feasible. I'm guessing with housing, the sale goes through before the houses get built, so you can roll it over. Different situation with solar because developer usually wants to rent the land. Maybe OK if you find a buyer before you sign the solar lease.

Will be interesting if anyone has a definitive answer.

Tha will be HMRC!!

 

[Grass And Grain]

Tha will be HMRC!!

They just make the answer up, and if in any doubt they say "tax is due".

 

[steveR]

They just make the answer up, and if in any doubt they say "tax is due".

And then the arguments start... That is where the expensive specialist earns his pay.... Hopefully.

 

[Nearly]

But if you've done the research you've a chance of being prepared.