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New queries, issue 4615

12 September 2017
Issue: 4615 / Categories: Forum & Feedback

Family transfers; What’s my name?; VAT accounting; For keeps

Family transfers

Capital gains tax on transfer of land and subsequent property developments costs.

My clients Mr & Mrs T bought some land about ten years ago for £130 000. The land was split into two plots (£65 000 a plot).

The couple’s two sons each built residential properties on the land and are now living in them. Each cost about £150 000 to build. Now they are valued at about £300 000.

Mr & Mrs T want to transfer the land to their sons. The capital gain for each property is therefore as follows:

  • Market value: £300 000
  • Costs of building: £150 000 (incurred by sons)
  • Cost of plot: £65 000
  • Gain: £85 000.

We believe that the costs incurred by the sons would be allowable under TCGA 1992 s...

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