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Entrepreneurs’ Relief - Sale of Land for Development

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21 August 2014

Entrepreneurs’ Relief (ER) is a valuable tax relief which can reduce the rate of Capital Gains Tax (CGT) payable on a sale of land from the current maximum rate of 28%, to a rate of 10%. Each individual has a lifetime limit of £10 million for the relief.

We are seeing a lot of interest from developers in acquiring land for housing, particularly on the edge of existing towns and villages. Even where a business is to continue, this can offer an opportunity to obtain a large amount of funds which, for example, may be required to sort out future succession/inheritance issues. Hence rollover relief will not be claimed, and ER will significantly reduce any CGT payable.

The qualifying requirements for ER mean that a straight sale of land with no change in the business will not qualify for the relief. However, it may be possible to structure a business change so that a sale of land for development qualifies for ER and significantly reduces the CGT payable.

For further information please contact Peter Griffiths on 01242 680000.