03 August 2006
My client sold a piece of land for £40,000 and received a cheque from the purchaser six months before any contract was drawn up. The payment was in the tax year before the contract was made.
I have it in mind that a contract for the sale of land must be put into writing and I presume that I should treat the disposal for capital gains tax purposes as being made in the later year, thereby deferring payment of the tax liability.
Is this approach correct and can readers explain the principles to enable me to justify this to HMRC?
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