Has anyone here sold any land? Our neighbour wants to buy a strip of land on our property. We're happy with price etc. but don't now if it would be subject to Capital Gains, not a problem as under annual allowance, or if it would be subject to income tax. Could speak to a solicitor but prefer having knowledge beforehand to help prevent BS.
A straightforward sale of land or property (whether for development or not) would normally lead to a Capital Gains Tax (CGT) charge. The gain is calculated as the sale price, less the purchase cost and any qualifying improvement expenditure, and less any incidental costs of purchase or sale. Got this on the internet from 2018. Presume it's still the same. If you'll still be under the annual allowance then fine but then Inland Rev. then go on to say :- According to Internal Revenue Service publication 544 , "Sales and Other Dispositions of Assets," you must report the sale of vacant land as a capital gain or loss. Use Form 8949, "Sales and Other Dispositions of Capital Assets," to figure the amount of gain or loss from the sale. Seems like they go out of their way to try and collect something - as per usual - but as you'll have deeds to change I doubt if you can just pocket it and run.
I am sure if you are married you can claim capital gains for both of you thus doubling your allowance sell it as joint
Thanks. I did some digging and we can actually claim an exception from Capital Gains under Principal Private Residence Relief as we own it and the entire property is under 0.5 hectares. Hopefully academic now though as we may be selling him the house
