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CGT on land given by parents

matthewsnowy
Posts: 1
Joined: Thu Apr 13, 2017 11:08 am

CGT on land given by parents

Postby matthewsnowy » Thu Apr 13, 2017 11:15 am

Thanks for all comments in advance

My parents purchased about 2 acres over 40 years ago for 6k behind their house. They then got permission and built a house on it in 1988, they sold the house 2 years later but kept half the land which they gave to my brother and I a few years ago. The land is now worth approx 80k but we are attempting planning consent and would then sell for 360k. If my parents had kept it they would be liable for no CGT with 11k annual allowance? How much will we be liable for now we own it?

Thanks again

maths
Posts: 6743
Joined: Wed Aug 06, 2008 3:25 pm

Re: CGT on land given by parents

Postby maths » Thu Apr 20, 2017 8:56 pm

The 2 acre purchase around 1976 would have to have been revalued as at 31 March 1982 to market value for CGT purposes.
The sale of the subsequent house built on the land would have been subject to CGT on any gain made (or possible income tax).

The sale of the built property would for CGT have been a partial disposal as some of the 2 acres of land was retained. At the date of sale the land retained would have needed to have been valued.

The gift to you/brother of the land retained would itself have given rise to a CGT charge on any gain made on this piece of land. The gift would have been assumed to have occurred at market value.

If you/brother sell the land with planning permission CGT would be payable on the gain which would basically be the difference between sales value and cost (the latter being the market value of the land at the date it was given to you/brother by parents).


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