Buying agricultural land from Father

[PurpleHat]

Hi

I hope this thread is in the correct forum.

My father is selling his agricultural land he has owned for the past 15+ years. He has offered me first refusal on buying some of it. I am considering buying some as an investment (possible to sell as sites – in the future). Would anybody know the legal implications/costs involved in buying approx 1.5 acres from my father? Is there capital gains tax implication? I should point out I previously was transferred as site on the farm, where I build a house, in case this makes a difference.

Thanks

P

 

[Vanilla]

There are three potential taxes:

1. CGT for your father on the disposal. He should seek his accountants advice. There is an exemption farmers can claim if they have farmed the land for 10 years or declared an income from it and they are over 55- his accountant will advise.

2. CAT- or gift tax- for you. This would apply only if you are buying below market value and would depend on the value of the land, the value of the element of gift and how much of your threshold is left to you after the previous gift of a site. There are some reliefs available also depending on the circumstances.

3. Stamp duty- also for you. Stamp duty on agricultural land is on a tiered basis depending on the value of the land. It would be halved for consanguinity relief in this case. The only possible relief is young trained farmer relief if you qualify.