John asks: “A family member is due to sell some land for in excess of £1m. What tax would be payable on this as it has no residential property on it?”
Q&A 53 – Capital Gains Tax On Land – Shownotes
Today’s question comes from John:
A family member is due to sell some land for in excess of £1m. What tax would be payable on this as it has no residential property on it? Many thanks, John.
Capital Gains Tax On Land
Thanks for your question John.
Capital Gains Tax is due on the sale of land as per the rules in the article “how to avoid capital gains tax on property”. Rather than going into too much detail today, I’ll let you follow the links in the show notes as we receive a lot of questions on the topic and cover many on the Q&A podcasts.
For example, have a listen to the following episodes if you haven’t already:
However, I feel I should go a little deeper into this question because it’s related to the sale of land rather than property in all previous questions.
No Tax Relief On Land
Because the land has no property on it, it is not anyone’s “home” and hence the PPR and letting relief will not be applicable.
So, the capital gains tax will be due on the sales price, less the acquisition price, less any costs related to the sale of the land and any significant capital improvements made to the land during the period of ownership.
The only relevant exception may be if your family member is planning to use the proceeds from the sale to buy new land.
In this case, they can roll forward the capital gains tax to the new property. However, this is subject to meeting many requirements. For more detail, see this government guidance:
Hope that helps John.
Ask Your Question
This show runs three times a week and answers all of your personal finance questions. If you have any questions, please don’t be shy to ask. You can ask in three ways:
- Leave a comment on any of the Q&A podcast shownotes (including this one)
- Email me at firstname.lastname@example.org
- Leave a message on the Speakpipe App which you will find below and on our “submit a question” page: