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Holdover relief on a let cottage if transferred with agricultural land

22 October 2019 / Fred Butler , Malcolm Gunn
Issue: 4717 / Categories: Comment & Analysis
Letting lacuna?

Key points

  • Generally let property is not eligible for holdover relief.
  • A transfer as one asset with land let on a farm business tenancy should enable relief to be claimed on the whole transfer.

There is much debate on whether let agricultural cottages can be eligible for holdover relief under TCGA 1992 s 165 so that they can be passed down to the next generation without capital gains tax. To illustrate let’s suppose that Jonty owns a farm but has retired from farming. Part of the land is now let on a farm business tenancy and part is used for his own diversified non-farming trading activities. The farm is one asset for capital gains tax purposes and includes a farm cottage that is let on an assured shorthold tenancy. Jonty would like to gift the cottage to his daughter but he cannot obtain holdover...

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