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Capital gains tax on transfer of land and 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; and gain’ £85 000.
We believe that the costs incurred by the sons would be allowable under TCGA 1992 s 38(1)(b) which states: ‘The amount of any expenditure wholly and exclusively incurred on the asset by him or on his behalf for the purpose of enhancing the value of...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
