improving ground for sale purposes

[Exfarmer]

|The tax implications are as follows.
you have obviously paid off any inheritance tax so lets assume the land was valued at £100,000 for IHT.
If say you sell this land today for £200,000 you have a CGT of £100,000.
I think you have 2 siblings each having an equal share.
Each sibling has a CGT allowance of £11,700 so 3 X £11,700 equals a total allowance of £35,100
a Taxable gain of £100,000 - £35,100 = £64,900
Now it gets complicated as the tax rate varies according to the individual
Each individual will have a gain of
£16,225 and they will probably pay tax at the 18% rate i.e. £2,920 . However if they are higher earners I believe it could be 28% , thus £4,543.

However I must emphasis I am no accountant, tax expert, or other wise
Do take advice from a properly qualified account.
You may be able to split the property in 2 lots and sell them over a period of 2 years or even 3 reducing this bill to near zero as you have a Tax free allowance for every year of transfers
Also my calculations may be totally wrong!

[essexpete]

https://www.gov.uk/capital-gains-tax/rates

This might be of help?

[essexpete]

You are correct, I think in the figure of £325 for your mothers estate. You have not mentioned your father, or if she had a partner. In certain circumstances, the wife or husbands allowances can also be added. In my case, my wife died 11 years ago but her relief can also be added, quite important in these days of inflated land values.
With regard to your other post, the situation becomes more complex.
In effect to gain agricultural relief, in my case especially, I am virtually condemned to farming for my whole life, especially in the case of the farmhouse residence.
The other quirk in the case of rollover relief, if I die before rolling over the capital gains tax has to be paid out of my estate!
The whole situation needs the advice and input from both an accountant, and a solicitor, in conjunction. Both have to be pretty switched on too!
Jack Caley.

Jack have you not got to just be the boss on paper and keep signing a few papers to not be retired? Hate to mention as well but important for anyone registering a death in the farming world not to put retired on the certificate. We, as a family, have just been through IHT worrying time and HMRC will not leave a stone unturned.

[Exfarmer]

The inheritance tax threshold from the entire estate is 325k it would seem.....and that would be for each benefitiaries. But yes that would be set at the point of decease

This of course has no bearing on the current IHT issues, but a point of correction, The IHT duty is based on the net estate worth, not anything to do with how much is left to each beneficiary.
However it is common in a will to leave monies or property divided so smaller beneficiaries get there share free of tax which its paid from the redeye left to the main beneficiaries. Remember the estate is not supposed to be divided until the duty is paid,
There have been modifications over the last few years particularly changing how thresholds can be passed between partners meaning houses in particular do not have to be sold on death. Also of course goods can be passed between partners without IHT until the second partner dies.

[tina]

All very valid and interesting points exfarmer, mmakes complete sense to me, thanks for your input!

[tina]

Thanks Essexpete for the link, I'd looked on the .gov site the other week to get my head around it but I think I probably just gave up reading!!
I think I'll just accept the moral of the story is, yes, somehow, somehwere they will tax us, again.....and again ....and again! !! :-D
:'(

[Jack_Caley]

Thanks Essexpete for the link, I'd looked on the .gov site the other week to get my head around it but I think I probably just gave up reading!!
I think I'll just accept the moral of the story is, yes, somehow, somehwere they will tax us, again.....and again ....and again! !! :-D
:'(

The ironic thing as far as I am concerned is the fact that governments create inflation by printing money, and then they have a glorious opportunity to tax the inflation.
At the moment I have a situation where I paid £800 pounds per acre for some land in 1974. The going rate around here now is around £8-10000 an acre. I suppose in real terms you could argue that the land is of the same value. They just tax the artificial increase.
I am aware in a civilised society we should accept faxes, but sometimes it does come a little hard.
Jack Caley

[tina]

Yes land is the same price here in the south I do believe.
I accept taxes where we are taxed once, the part that frustrates me is taxing in different 'forms/areas'. It is not so much straightforward different tax in my eyes, it's duplicated tax if you like, so I feel as though you are taxed on money/assets that you rightly earned and Infact have already paid your tax further down the (previous) line!