CGT on sale of land

[Robert]

A relative has recently sold part of their farm to the local school who are going to build on it.

The farm was inherited from a spouse in 1994. The spouse acquired it prior to 1974.

Is the land to be considered development land for CGT. Also is the cost of the land the value at the date of inheritance.

 

[c1966]

The area of development land for cgt purposes is complex and rather tedious.

The "only" difference between development land and non-development land is that the former does not qualify for indexation relief on its development value. Only its current use value is what is allowed for indexation. As the land was acquired prior to 1974 the valuation date (as you probably know) is April 1974. You will probably need to get a current use valuation at April 1974 and a "hope valuation" at the same date. The former valuation can be indexed for inflation but the latter cannot. Any valuer will be familar with the difference in valuation as this is a common issue.