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Readers' forum : Field development

17 May 2016
Issue: 4550 / Categories: Forum & Feedback

The capital gains tax treatment of an uplift payment on subsequent sale.

In 2001 my farming client sold an agricultural field to a property developer realising a capital gain. This was declared to HMRC and was subject to a claim for taper relief.

My client retained a security over the field so that if the field was sold for development he would receive a share of the uplift in value in return for discharge of that security. The developer is also a farmer and has used the field for qualifying agricultural purposes throughout his ownership.

The field was sold for development in 2015/16 and my client has received an uplift payment of £850 000. My client continues to trade as a farmer.

I should be grateful if Taxation readers could advise on the capital gains calculation of that £850 000 in my client’s hands.

I look forward to replies.

Query 18 777 – Icabaca.


Reply by  Toby Jug.


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