If so, are you sure you will be able to claim all available business reliefs?
For farmers, entrepreneurs’ relief, which effectively reduces capital gains tax to 10%, may be more useful than the alternative rollover relief.
Anyone considering a sale of development land should plan carefully for that sale in order to ensure that entrepreneurs’ relief will be available. This was highlighted in a recent First-tier Tribunal decision – Jeremy Rice v HMRC where it was held that a significant change in a business was a cessation of one trade and the start of another, thus ensuring that the valuable reliefs were available.
There are ways to bring about a cessation of trade, particularly with partnerships, but careful planning and tax advice should be sought as soon as there is even the possibility of such a sale. With Development land sales increasing, the value of good tax planning and advice cannot be underestimated. At Green & Co we have helped a number of businesses maximise their reliefs on sales of both land and trades. Please do contact us should you require help or further advice.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.