No CGT/Stamp Duty if Buying & Selling Land within a short period?

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My brother has been told that if he sells land and buys land at the same time (or maybe within a year) he won't be liable to CGT/Stamp Duty.

Obviously i have advised him to get professional tax advise from an Accountant but can anyone confirm if this advise is correct & how it works?

Thanks..
 
Re: No CGT/Stamp Duty if Buying & Selling Land within a short period???

ANC said:
My brother has been told that if he sells land and buys land at the same time (or maybe within a year) he won't be liable to CGT/Stamp Duty.

Obviously i have advised him to get professional tax advise from an Accountant but can anyone confirm if this advise is correct & how it works?

Thanks..
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Its certainly not correct in relation to CGT, unless of course he wants to have the transaction taxed as part of a trade under income tax rules at 20%/41% plus PRSI.
 
Re: No CGT/Stamp Duty if Buying & Selling Land within a short period???

and he's definitely not right about the stamp duty aspect either.
 
Maybe your brother or somebody who is "advising" him is thinking of CGT rollover relief which used to allow you to avoid or reduce CGT by reinvesting capital gains within some period of time. This relief was abolished years ago.
 
i found something on the Revenue website and it seems there is a Farm Consolidation Relief in relation to stamp duty on land bought and sold within 18 months of each other.

The following extract from the Revenues "Guide to Capital Gains Tax" from 2005 seems to imply the rollover relief is still applicable in some cases too (including land).

"
9(a).​
​
Replacement of business and other assets​

Where the proceeds of the sale of certain business assets are re-invested in other business assets for
use in a trade, the taxation of the gain made on the sale may be​
​
deferred (“rolled over”) if the assets
acquired in replacement continue to be used by the same person in the trade or business. The new
assets must be acquired in the period one year before and three years after the disposal of the old
assets.There is provision for partial relief where only part of the proceeds are re-invested. The business
assets which qualify for this relief are, plant or machinery, buildings and land other than development
land (see Chapter 4) and goodwill.
The chargeable gain on which the tax was deferred is treated as arising when that person ceases to use
the replacement asset for the purpose of the trade or business. Such a chargeable gain should be shown​

in the return for the year of assessment in which the replacement asset ceases to be so used."

 
Farm consolidation relief only applies to very specific situations and a certificate from Teagasc is required. It would not apply to someone who was just buying and selling property for a gain.

Rollover relief does NOT apply anymore.
 
i read the specific situations & he seems to qualify. he's not buying & selling land for a gain, he's selling farmland which is 20 miles from his house to buy farmland which is beside his house.

thanks for clarifying the rollover relief situation.
 
ANC said:
i read the specific situations & he seems to qualify. he's not buying & selling land for a gain, he's selling farmland which is 20 miles from his house to buy farmland which is beside his house.

thanks for clarifying the rollover relief situation.
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Get him to Teagasc so! Sounds like the farm consolidation does apply.
 
ANC said:
i read the specific situations & he seems to qualify. he's not buying & selling land for a gain, he's selling farmland which is 20 miles from his house to buy farmland which is beside his house.
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If you had stated this in the first instance, we might not have wasted our time on useless speculation!
 
ANC said:
Where the proceeds of the sale of certain business assets are re-invested in other business assets for
use in a trade,
Click to expand...

Whats the definition of a 'trade' ? are all business not equal here ?
If it said farming business I d understand. But normally when I see trade it means electrician /plumber etc .

Or is this a trade of land ? not the sale and purchase of new land ?? :confused:

I'd like to know if this can be used by any small business or do you have to be specialised only in something like farming.
 
Stamp Duty may not necessarily be payable in the event that the transaction would qualify for sub-sale relief.

Sub-sale relief may be available in a situation where the purchaserdoes not take a conveyance of the legal interest and (subsequently) enters into a contract to sell the land to another party ..... when I availed of this reilef the sale contract was not agreed or entered into for approx 8 months after the purchase contracts had been completed. My understanding at the time was that if it had taken much longer to dispose of the surplus property that the stamp duty plus interest would have been payable.
 
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