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Farm Business
Agricultural Matters
Tax implications.
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<blockquote data-quote="farmerdan7618" data-source="post: 7070782" data-attributes="member: 49428"><p>CGT can be quite simple. The easy way is to just pop the gain (sale less purchase) onto a tax return and pay the tax. 10% or 20% on anything that isn't residential, 18% or 28% on residential. Rate depends on your income tax bracket depending on your income. Unlikely to get you the best outcome in terms of tax paid, but is compliant and cheap on professional fees.</p><p></p><p>Slightly better outcome, after the sale, pop the gain on the return, see what relief it qualified for. A good accountant will do this as a matter of course. Roll over relief, 3 years forward or one year back, assets sold and purchased must generally be business assets. Business Asset Disposal Relief, new name for Entrepreneurs Relief, only £1m lifetime limit now, as it says on the tin, for disposing of business assets but needs to be a sale of part of the business for 10% rate, not just a bit of land. Any previous capital losses? Former dairy farmer with milk quota losses? Can be offset against other gains. The best that can be done by professionals after the sale has gone through.</p><p></p><p>Ideally, take advice before you sell. That way a good accountant can make sure you qualify for as many reliefs as possible. Maybe split between spouses before sale, make sure timing is right for rollover, ensure losses are used against the right sales, make sure the 10% rate applies if disposing of part of the business. A good accountant should always earn their fees in these situations, or be honest if the cost would outweigh a saving.</p><p></p><p>I must also caveat that I do not know your circumstances and this cannot be relied on as tax advice.</p><p></p><p>Should also say that I do work for Old Mill Accountants in the day job, and would always be happy to speak to anyone regarding accountancy and tax (and farming!). Just send a pm on here.</p></blockquote><p></p>
[QUOTE="farmerdan7618, post: 7070782, member: 49428"] CGT can be quite simple. The easy way is to just pop the gain (sale less purchase) onto a tax return and pay the tax. 10% or 20% on anything that isn't residential, 18% or 28% on residential. Rate depends on your income tax bracket depending on your income. Unlikely to get you the best outcome in terms of tax paid, but is compliant and cheap on professional fees. Slightly better outcome, after the sale, pop the gain on the return, see what relief it qualified for. A good accountant will do this as a matter of course. Roll over relief, 3 years forward or one year back, assets sold and purchased must generally be business assets. Business Asset Disposal Relief, new name for Entrepreneurs Relief, only £1m lifetime limit now, as it says on the tin, for disposing of business assets but needs to be a sale of part of the business for 10% rate, not just a bit of land. Any previous capital losses? Former dairy farmer with milk quota losses? Can be offset against other gains. The best that can be done by professionals after the sale has gone through. Ideally, take advice before you sell. That way a good accountant can make sure you qualify for as many reliefs as possible. Maybe split between spouses before sale, make sure timing is right for rollover, ensure losses are used against the right sales, make sure the 10% rate applies if disposing of part of the business. A good accountant should always earn their fees in these situations, or be honest if the cost would outweigh a saving. I must also caveat that I do not know your circumstances and this cannot be relied on as tax advice. Should also say that I do work for Old Mill Accountants in the day job, and would always be happy to speak to anyone regarding accountancy and tax (and farming!). Just send a pm on here. [/QUOTE]
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