Application of business asset disposal relief to sales of land

Against a backdrop of changes to the agricultural subsidy system and the continuing coronavirus pandemic we have found that estates and farming businesses have been prompted to undertake reviews of their operations. This has included streamlining or diversifying primary activities but also looking to take advantage of current land prices and the continued demand for land to assist with large-scale housebuilding through capital gains tax disposals.

While a sale of the whole business is unlikely to be a realistic option for these family-managed enterprises there may be the opportunity to sell small outlying parcels of land or identifying sites with development potential on the edge of existing towns. Typically such ‘small’ land sales might meet the part-disposal rules where sales proceeds are deducted from the capital gains tax base cost of the retained land. However if appropriately structured business asset disposal relief...