Tax implications.

nails

Member
Location
East Dorset
Hoping some one will give me an easy answer to this . If i sell a parcel of land and re-invest the money in another property, possibly a small business like B&B what are the tax implications ? Is it just Capital gains at the usual rate? Thanks in advance.
 

Goweresque

Member
Location
North Wilts
Depends on what you invest in, and how big the gain is. You can make a gain of c. £12k/yr before paying any CGT, so if the gain is less than that there's no tax to pay. If there is a big gain (a development sale lets say) then you can roll that money over into other business assets and pay no tax. So a B&B would count, as long as you continued to run it as a B&B. But some buy to let rental properties would not, they are counted as investment assets. Qualifying assets would be more farmland, hotels, pubs, holiday lets, any type of business you like really, as long as you are running it as one after purchase. Anything that you are just renting out would be investment. Holiday lets are an odd one, they do qualify for roll over relief, despite being a rental type business, I guess its considered that you're doing enough work and taking enough risk that it qualifies as a business asset.
 
Depends on what you invest in, and how big the gain is. You can make a gain of c. £12k/yr before paying any CGT, so if the gain is less than that there's no tax to pay. If there is a big gain (a development sale lets say) then you can roll that money over into other business assets and pay no tax. So a B&B would count, as long as you continued to run it as a B&B. But some buy to let rental properties would not, they are counted as investment assets. Qualifying assets would be more farmland, hotels, pubs, holiday lets, any type of business you like really, as long as you are running it as one after purchase. Anything that you are just renting out would be investment. Holiday lets are an odd one, they do qualify for roll over relief, despite being a rental type business, I guess its considered that you're doing enough work and taking enough risk that it qualifies as a business asset.
As you say, holiday let’s sre a strange one, what would be the implications of buying a house as a holiday let and at some point in the future changing to a straight rental property.
 

Goweresque

Member
Location
North Wilts
As you say, holiday let’s sre a strange one, what would be the implications of buying a house as a holiday let and at some point in the future changing to a straight rental property.
It can be done, as my father did it :oops:

That was quite a long time ago at a point when I wasn't involved in the family business to any great extent, so don't really know how it was achieved, or how long it had to be run as a holiday let before it could be turned into a normal letting. But it would all have been done with accountants advice, so I'm assuming it was perfectly legit.
 

Nearly

Member
Location
North of York
'Easy answer' ? No such thing.

I believe holiday lets count for rollover if there's above a certain % occupation / bookings in the first year.

If you have lots of friends/family looking for a week away it would be daft to drop below the critical %.


Best to ask an expert but you need information to be able to ask the right questions.
 
Last edited:

nails

Member
Location
East Dorset
Depends on what you invest in, and how big the gain is. You can make a gain of c. £12k/yr before paying any CGT, so if the gain is less than that there's no tax to pay. If there is a big gain (a development sale lets say) then you can roll that money over into other business assets and pay no tax. So a B&B would count, as long as you continued to run it as a B&B. But some buy to let rental properties would not, they are counted as investment assets. Qualifying assets would be more farmland, hotels, pubs, holiday lets, any type of business you like really, as long as you are running it as one after purchase. Anything that you are just renting out would be investment. Holiday lets are an odd one, they do qualify for roll over relief, despite being a rental type business, I guess its considered that you're doing enough work and taking enough risk that it qualifies as a business asset.
Yes that is sort of what i thought. We have a lot of thinking and family discussion to do trying to keep everyone happy.:scratchhead:
 

Nearly

Member
Location
North of York
We're selling our old farmyard and 25 acres soon.
With enough family co-owners and selling in small enough lots, over a number of years, we don't plan on using rollover, just paying a bit of tax.
It's about maximising the net income after tax, not going for one big sale and paying 38% or having to pay over the odds somewhere and roll it over.
But if one of the new neighbours here decides to sell us a bit then we have 3 years to do it. ;)
 

Exfarmer

Member
Location
Bury St Edmunds
Hoping some one will give me an easy answer to this . If i sell a parcel of land and re-invest the money in another property, possibly a small business like B&B what are the tax implications ? Is it just Capital gains at the usual rate? Thanks in advance.
Have s friend who has been caught very badly, by not taking full professional advice on this very matter, take great care!
 

jendan

Member
We're selling our old farmyard and 25 acres soon.
With enough family co-owners and selling in small enough lots, over a number of years, we don't plan on using rollover, just paying a bit of tax.
It's about maximising the net income after tax, not going for one big sale and paying 38% or having to pay over the odds somewhere and roll it over.
But if one of the new neighbours here decides to sell us a bit then we have 3 years to do it. ;)
Have you had planning permission granted for houses,or are you selling just as it is?
 

jendan

Member
If the advice is good and correct i don,t mind paying(y) ,a little bit:)
If you retire from farming alltogether,you pay 10% on the capital gain from when you bought it,or inherited from the date of probate,minus your allowance of £12,400. Parcels of land are 20%.Your main living house is exempt.Other houses are 28%,as are farm buildings. My accountant charged me £1400 for that information.I am yet to find out if the time to pay CGT stands at 30 days from the day of completion(meant to come in on the 6th April this year)or if they have shelved it due to Coronavirus,and its the end of your tax year,as it used to be. I think it used to be 3 years to claim CGT back by purchasing through roll over relief. (I am happy to be corrected on any of the above)
 
If you retire from farming alltogether,you pay 10% on the capital gain from when you bought it,or inherited from the date of probate,minus your allowance of £12,400. Parcels of land are 20%.Your main living house is exempt.Other houses are 28%,as are farm buildings. My accountant charged me £1400 for that information.I am yet to find out if the time to pay CGT stands at 30 days from the day of completion(meant to come in on the 6th April this year)or if they have shelved it due to Coronavirus,and its the end of your tax year,as it used to be. I think it used to be 3 years to claim CGT back by purchasing through roll over relief. (I am happy to be corrected on any of the above)
On the last bit, I’m sure my accountant said it was two years forward one year back.
So if you sell land you have two years to roll the proceeds over or the situation I’m in at the moment, have just bought some land but may well sell some outlying land to go towards paying for it, if I want to do that I have 12 months from date of purchase to sell if I want to roll over the gain into the land I’ve bought.
 

Goweresque

Member
Location
North Wilts
On the last bit, I’m sure my accountant said it was two years forward one year back.
So if you sell land you have two years to roll the proceeds over or the situation I’m in at the moment, have just bought some land but may well sell some outlying land to go towards paying for it, if I want to do that I have 12 months from date of purchase to sell if I want to roll over the gain into the land I’ve bought.
According to the gov.uk website, you have up to 3 years from the date of sale (or 1 year prior) to buy a new asset and get rollover relief.

https://www.gov.uk/business-asset-rollover-relief
 

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First exports of UK beef to the USA in 20 years underway

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UK beef to be served on US plates for first time in over 20 years, with first exports commencing from a Northern Irish facility.

The first shipments of UK beef are to depart for the USA today (30th September), marking a historic moment for UK farmers and food producers.


Following the USA’s longstanding ban on EU beef – introduced in the wake of the BSE outbreak in 1996 – market access for UK beef was granted in March 2020. UK beef producers now have access to the US market for the first time in over 20 years.

Today’s news means the sector can now begin to reap the economic benefits of trade with the US – with industry estimating beef exports will be worth £66 million over the next five years.

The first shipment of beef originating from...
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