Do you qualify for the 10% rate for Capital Gains Tax?

Entrepreneurs’ Relief reduces the amount of the Capital Gains Tax on a disposal of a qualifying business asset as long as you have met the qualifying conditions.

The lifetime allowance was increased to
£10 million
from April 2011.

■ Farmers who own and farm their land are entitled to Entrepreneurs’ Relief. Please watch out for problems with mixed ownership where the land is owned jointly with non farming family members.

■ Also, to qualify, the sale of assets such as land must be associated with a material reduction in profit. This is effectively a retirement relief
and will not apply to the sale of a few fields that are a small percentage of the whole farm.

■ HM Revenue & Customs are challenging many claims for Entrepreneurs’ Relief and great care is needed if this relief is to be heavily relied upon in any tax planning.

Anyone looking to sell their farm must take advice as early as possible to ensure any pitfalls are avoided.