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Where Taxpayers and Advisers Meet

vacant land sale

ML
Posts: 19
Joined: Wed Aug 06, 2008 3:05 pm

vacant land sale

Postby ML » Thu Aug 27, 2020 7:24 pm

I own a parcel of very old scrub land of low agricultural use, not used for anything. It measures 800 ft square and somebody wants to purchase it to extend their garden with no development. Would there be any CGT implications if it's difficult to ascertain a value on it?

bd6759
Posts: 3252
Joined: Sat Feb 01, 2014 3:26 pm

Re: vacant land sale

Postby bd6759 » Thu Aug 27, 2020 9:01 pm

Its value is whatever a person is willing to pay for it.

The gain is the difference between what you bought it for and what you sell it for.

ML
Posts: 19
Joined: Wed Aug 06, 2008 3:05 pm

Re: vacant land sale

Postby ML » Fri Aug 28, 2020 7:40 am

Thanks bd, It would be difficult to ascertain its value, so do I estimate it to be the same as its selling the price? You see it's only a fraction size of other scrub land next to it.

AGoodman
Posts: 1079
Joined: Fri May 16, 2014 3:47 pm

Re: vacant land sale

Postby AGoodman » Fri Aug 28, 2020 12:26 pm

You use the price you are selling at as the value - no need to estimate.

Your acquisition value may be trickier:

- if you bought it alone, whatever you paid for it
- if you inherited it alone, whatever the probate value was
- if you received it as a gift, you need to estimate its market value at the time you received it
- if you acquired it as part of a larger parcel, you need to apportion the acquisition value between this land and the rest of the parcel (worked out using whichever of the above methods applies).

ML
Posts: 19
Joined: Wed Aug 06, 2008 3:05 pm

Re: vacant land sale

Postby ML » Fri Aug 28, 2020 1:30 pm

Thanks Mr G, I was thinking your answer might come. So, if the overall scrub land was considered as low agricultural grade, I'd divide the parcel I'm selling into the whole measure of this land based on its market value. What say it becomes very small in proportion, say less than £5?

bd6759
Posts: 3252
Joined: Sat Feb 01, 2014 3:26 pm

Re: vacant land sale

Postby bd6759 » Fri Aug 28, 2020 6:26 pm

How much are you selling this bit of land for?

ML
Posts: 19
Joined: Wed Aug 06, 2008 3:05 pm

Re: vacant land sale

Postby ML » Sat Aug 29, 2020 8:08 pm

10k

bd6759
Posts: 3252
Joined: Sat Feb 01, 2014 3:26 pm

Re: vacant land sale

Postby bd6759 » Sun Aug 30, 2020 11:42 am

If that is your only disposal in the year, the gain is below the annual exemption and proceeds are less that 4 times the annual exemption.

There is no CGT to pay, and no reporting requirement.

ML
Posts: 19
Joined: Wed Aug 06, 2008 3:05 pm

Re: vacant land sale

Postby ML » Sun Aug 30, 2020 12:42 pm

Thanks Bd, I am most grateful. I had visions of having to work out a value for the scrub land and doing a calculation.


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