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Where Taxpayers and Advisers Meet

Splitting CGT over 2 years

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Joined: Wed Aug 06, 2008 3:32 pm

Splitting CGT over 2 years

Postby lloyds99 » Mon Feb 23, 2015 3:12 pm

I'm selling a property to another developer for £270,000 and will be left with a hefty CGT bill. Is it possible/lawful to split the CGT bill over 2 tax years by selling 50% to him before 5th April and 50% after so that I capture 2 years of allowances? or is there any other way I could consider selling.
Thank You

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Re: Splitting CGT over 2 years

Postby bd6759 » Tue Feb 24, 2015 12:01 am

No. It would be treated as a single transaction.

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Re: Splitting CGT over 2 years

Postby lloyds99 » Tue Feb 24, 2015 9:32 am

Thanks for your reply.

Ian McTernan CTA
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Location: Bedford

Re: Splitting CGT over 2 years

Postby Ian McTernan CTA » Tue Feb 24, 2015 2:06 pm

As a developer selling a property is a trading transaction not a CGT one.
McTernan Associates Ltd
Chartered Tax Advisers
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Re: Splitting CGT over 2 years

Postby khalid » Thu Feb 26, 2015 10:46 pm

I do not understand bd6795. It is quite legal to sell half of a property. These are 2 transactions.

Peter D
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Re: Splitting CGT over 2 years

Postby Peter D » Fri Feb 27, 2015 12:05 pm

It's a linked transaction to the same purchaser. Look at it another way. The Purchaser will have to pay SDLT if it was two purchases he would avoid SDLT. It is not going to happen. Regards Peter

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Re: Splitting CGT over 2 years

Postby welshtrustees » Sun Mar 01, 2015 2:45 pm

"It is not going to happen"

I would be interested on what basis you say this? I am not aware that the same definition of linked transactions for SDLT applies to transactions for CGT. The anti-avoidance provisions of CGT S19/S20 are specifically related to linked transactions that result in an aggregate disposal of less than the market value i.e. because the sum of minority stakes is less than the value of the whole; whereas linked transactions/schemes under Corporation Tax is much broader.

Of course the bar will be very high, in terms of setting up a commercial arrangement that genuinely only transfers 50% beneficial ownership and does not create an ascertainable, even if contingent, deferred payment for the rest. Indeed it is probably not possible for the vendor to have any certainty that the second transaction will take place at all.

So in practise it might not be achievable, but from a CGT perspective is there a real reason why not?

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Re: Splitting CGT over 2 years

Postby King_Maker » Sun Mar 01, 2015 5:18 pm

I assume you are selling as an individual not a company?

If so,you need to establish which tax (Income Tax or CGT) is going to apply to this transaction.

Property development is normally subject to Income Tax (and NI)

Have you spoken to your accountant on the matter?

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