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Where Taxpayers and Advisers Meet

Capital Gains Tax on Garden Orchard Land

bjk423
Posts:3
Joined:Thu Jun 25, 2020 12:27 pm
Capital Gains Tax on Garden Orchard Land

Postby bjk423 » Fri Oct 29, 2021 3:54 pm

My father transferred a small plot of land 0.86 to my self and my brother an old garden area and sheds in 06/01/2001 this was registered with the land registery.

The land was originaly part of 2 cottages which we own but was separated out as separate item and has its own title number SL137899 Edition Date 06/05/2009.

It is simply described on the title dead as freeholdland land to the North of cottage A and cottage B 0.089 Acre

We now wish to sell this land to a friend for £100,000 splitting the sum 50 50 between my brother and I.


I earn about 10K from a rented property and my brother earns apro £30K and has a rental incom of £1000 /month from a cottage and rent from my parents as their house was transferred to my brother but allowing then to stay in the property for their natural lives (hence they pay my brother rent so they are not deemed to gaining benefit)


What capitagains tax will we be liable and is this personal capital gains or will it be treated as a commercial sale.

Is capital gains tax rate affected by your Personal income ie salary and rental income or it treated as a totally separate item. depending on the gain which in our case would be value 04/06/2001 40K and todays value 100K being a profit of 30K each

Sorry if this is long winded and disjointed but would be very gratfull if someone can provide free advice so we can financialy plan ahead , Hope you are all safe from covid

Many thanks Bryan

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Capital Gains Tax on Garden Orchard Land

Postby pawncob » Sat Oct 30, 2021 10:07 am

Firstly, did Dad declare the disposal in 2001 and pay the CGT due? On what do you base the £40k valuation?
With a pinch of salt take what I say, but don't exceed your RDA

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Capital Gains Tax on Garden Orchard Land

Postby bd6759 » Sat Oct 30, 2021 11:15 am

The capital gain is the difference between the value at the time you received it and its value when you dispose of it, less any allowable costs.

The rates of CGT are dependent on your personal income. The lower rate of CGT applies until your total income and gains exceed the income tax basic rate limit, then you pay the higher rate of CGT on the excess.

Whether your father paid CGT on his disposal to you is irrelevant and has no bearing on your tax.

bjk423
Posts:3
Joined:Thu Jun 25, 2020 12:27 pm

Re: Capital Gains Tax on Garden Orchard Land

Postby bjk423 » Sat Oct 30, 2021 11:35 am

Thankyou for your response , I have responded to your request and any further help appreciated

When my grandfather passed away in the eary 1970s the cottages were left to myself and my brother, this was before the boom and any duty if applicable was paid (
The orchard and sheds were left to my father which he then transferred to us in 2001 they were valued by estate agent at below £40K so no tax was due (all legal and above board ) . So we are only dealing with the current situation.

so value in 04/06/2001 was 40K
value now 2021 is 100k

so rise in value over 20 years is 60K

The sum of 100K will be split equaly between my brother and I 50K each.
is there an annual appreciation allowance (ie so much per year)

or what tax is due.

Thanks again


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