CGT on gift of house and land

I’m trying to establish the CGT rate in the following scenario. Mother and I are tenants in common on her property (75% mother, 25% myself; I don’t live there). Mother wants to gift / transfer 74% of her share of the property to me. Property comprises just over 5 acres of land (1.23 acres is garden / house and 3.79 acres field / paddock (undeveloped land surrounded by agricultural arable land). My mother is liable to CGT on disposal of land over over 1.2 acres only; the property is her principle residence and exempt CGT via principle residence relief. Question: is the CGT due on the land over 1.23 acres (ie the 3.79 acre field) taxed at 10% or 20%? (Mother is lower rate tax payer). Many thanks.

Hi,

On the basis of the info provided, CGT would be chargeable at the lower rate of 10%.                                                      

Capital Gains Tax: what you pay it on, rates and allowances

Thank you.

Thank you for the reply. With regards the above scenario, I want to ensure I pay the correct amount of CGT. I have had the land valued by a registered (MRICS) surveyor for the purposes of paying the CGT (not as a 'potential sale') and they have taken into account the 'marriage value' of the land as well i.e., its value in relation to the house that it belongs to. They have valued the land as 'x' as of 2023 and estimated its value when we purchased the land and house in 2009 'y'. To establish the CGT I was going to subtract 'x' from 'y' i.e. the value that it has risen by since purchase take 75% of that figure (my mothers share of the land; I already own 25% thus no CGT is due on that portion) and pay 10% of that. Can I confirm this is correct? Additionally, can I deduct legal fees incurred relating to the gift of transfer, capital losses for 'improvements' to the property (not land), land valuation fee (for the purpose of calculating the CGT) and stamp duty incurred at the time of purchase? Many thanks

Hi,

Yes, you are correct. the 10% rate will apply only up to the basic rate band for tax and if the gain is higher then 20% will be due. Please see our previous reply and link.

You can see information on what is classed as allowable expenses here:

CG15250 - Expenditure: incidental costs of acquisition and disposal

Thank you.