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Where Taxpayers and Advisers Meet

CGT on gifted land

Johnmeadows
Posts:7
Joined:Wed Dec 08, 2021 6:32 pm
CGT on gifted land

Postby Johnmeadows » Wed Dec 08, 2021 6:37 pm

Hi. My father gifted some land to me in 2012. He died in 2017. I am now selling the land.Am I liable for CGT

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

Re: CGT on gifted land

Postby pawncob » Thu Dec 09, 2021 10:57 am

Maybe. Depends on the figures.
With a pinch of salt take what I say, but don't exceed your RDA

Johnmeadows
Posts:7
Joined:Wed Dec 08, 2021 6:32 pm

Re: CGT on gifted land

Postby Johnmeadows » Thu Dec 09, 2021 11:28 am

I have a half share of the land so value is approx £85000 with total sale costs of around £2000 so… my share being £1000. Net income for me being £84000

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

Re: CGT on gifted land

Postby pawncob » Thu Dec 09, 2021 11:36 am

Yes there's CGT due.
With a pinch of salt take what I say, but don't exceed your RDA

Johnmeadows
Posts:7
Joined:Wed Dec 08, 2021 6:32 pm

Re: CGT on gifted land

Postby Johnmeadows » Thu Dec 09, 2021 11:51 am

My sister in law has the other half but hers is inherited. Presumably no CGT

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

Re: CGT on gifted land

Postby pawncob » Thu Dec 09, 2021 12:04 pm

It doesn't matter how she got it, a disposal is still chargeable to CGT.
With a pinch of salt take what I say, but don't exceed your RDA

Johnmeadows
Posts:7
Joined:Wed Dec 08, 2021 6:32 pm

Re: CGT on gifted land

Postby Johnmeadows » Thu Dec 09, 2021 7:44 pm

So what is the chargeable gain….a gift was nothing to me but clearly had a value at the time of gifting. Is the gain the difference between the lands value at the time of gift to me and the value/sale price now or £0 and the value/sale price now.

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

Re: CGT on gifted land

Postby pawncob » Thu Dec 09, 2021 8:13 pm

It had a base value when transferred to you. That's your cost (plus expenses) to be deducted from the sale proceeds, to give the gain.
With a pinch of salt take what I say, but don't exceed your RDA

Johnmeadows
Posts:7
Joined:Wed Dec 08, 2021 6:32 pm

Re: CGT on gifted land

Postby Johnmeadows » Thu Dec 09, 2021 10:49 pm

That is really helpful thanks but just leaves 1 question…how is the base value determined?

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: CGT on gifted land

Postby AGoodman » Fri Dec 10, 2021 8:54 am

The base value will just be the market value on the date your father gifted it to you plus any associated legal costs of the transfer.

If your "profit" over the base value is less than the annual gains exemption (£12,300) and you haven't used it for anything else, then there will not be any tax to pay. Anything over this will be taxed at 18% or 28% (basic/higher rates).


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