Readers forum: Capital gains tax issues on transfer of land

A client sole trader farmer (the father in this case) recently permitted his son and daughter-in-law to build a modest dwelling on his farmlands without first having transferred the legal title to the subject dwelling site to his son and daughter-in-law. Since construction of the subject dwelling it has always been used solely as a private residence of the son and his wife. Because of rural planning regulations in Northern Ireland the site (previously greenfield) is beside a farmyard cluster of buildings and the entrance is via a shared lane.

In consequence the subject site would have had very limited open market value meaning that it would be difficult to arrange a relating mortgage to finance the dwelling concerned. So the son and his wife had to arrange unsecured loans and use family resources to finance the construction costs. All of the parties involved...