f1sh4u

I know it is always best to seek some proper professional advise, but i wondered if any of you accountants could provide a brief answer.

In a hypothetical situation if a few years ago you bought a farm, as a business with a business name and the farm included a residential property (i.e.) a farm house that you lived in for the past 10 years. Then you sell some land a few years later and on the money you gain from this you pay the required capital gains tax.

Now you are in the situation where you want to sell the farm, but not really as a business, but as a residential property (i.e. the farm house with buildings and the remaining land - 30 acres).

If you are then only investing the money from the sale into a residential property and not another business how much tax (as a percentage) would you have to pay? And on what percentage of the sale price will you have to pay this?

Any help would be great

Longjing

I thought you said it was a quick question!

Sounds complicated to me. The main question is to what extent if any you can get business asset taper relief on the farm assets - that would reduce your bill significantly and is worth looking into in my view. Don't know the answer though.

If you don't get any taper relief you'll pay normal CGT rates - 40% for high rate income tax payers. Business asset taper can reduce that below 30%, normal taper relief gets it down to 32-odd at best. I don't know whether you can get either form of relief in these circs, but given the possible saving I'd say it's worth looking into.