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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.
The...
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