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My client owns a piece of land which has gone down in value considerably since he purchased it.
There is no doubt that this is a genuine reduction in value due to local circumstances. In broad terms the cost was £1m and the current value is about £600 000.
The land has been independently valued at that amount by two local valuers.
The son has offered to buy it from my client at the full market value paying on completion. My assumption was that as this was a market value transaction the £400 000 loss which my client would realise would be allowable against future gains.
However it has been suggested that as this was a connected person transaction the loss would only be available against future disposals between my client and his son.
That seems unfair to me – why...
