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  • Tax - Exchange of joint interest relief claim
    Exchange of joint interest relief claimIf you swap a joint interest in land or buildings to rationalise your ownership for no proceeds, you may be able to defer a capital gains tax charge.ReliefWithout any form of relief on any reallocation of interests, capital gains tax would arise in respect of the interest given up, with the consideration being the value of the interest obtained. It may be, however, that no cash actually changes hands.HMRC introduced a relief in 1984 which was replaced for exchanges taking...
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  • Tax - Claim for s.243 small part disposal relief
    Claim for s.243 small part disposal reliefIf you are forced to sell your land to a local authority under a compulsory purchase order, you could benefit from an expanded form of small part disposal relief.Part disposals - generallyWhen you make a part disposal of land you usually work out the taxble gain by apportioning the base cost of the total holding between the plot sold and the remainder using the formula:Total allowable expenses x A/(A+B)where A is the proceeds received for the plot sold, and B is the...
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  • Tax - Agreement to sever a joint tenancy
    Agreement to sever joint tenancy Owning a property as joint beneficial owners means each joint owner is taxed on an equal share of income or gains derived from the property. However, if one of them dies, their share automatically passes to the others before any will comes into effect. Severing the joint tenancy and instead owning the property as tenants-in-common means that each owner is entitled to a specific share of the property which can be bequeathed to anyone they wish. Automatic transferMost couples that...
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  • Tax - Election for land remediation relief
    Election for land remediation reliefLand remediation relief gives an enhanced deduction for qualifying revenue expenditure spent on bringing land back into use in some circumstances. Use our template letter to treat capital costs as qualifying.ReliefLand remediation relief (LRR) is an enhanced deduction of 150% on expenditure related to bringing contaminated land back into productive use. This can reduce tax, or for loss making companies give rise to a payable credit. Since 2009 this has included derelict land,...
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  • Tax - Claim to adjust base cost for part disposal of land
    Claim to adjust base cost for part disposal of landWhen selling a small part of a piece of land you are still liable for capital gains tax (CGT). However, if conditions are met, you can make a claim under s.242 Taxation of Chargeable Gains Act 1992 to deduct the sale proceeds from the base cost of the land instead of treating it as a sale of CGT purposes.Disposing of landLand is a chargeable asset for CGT purposes which means when you sell or transfer it, you need to calculate if you've made a gain or a loss....
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  • Tax - Land and buildings tenancy in common declaration
    Land and buildings tenancy-in-common declarationYou may need a tenancy-in-common declaration for a variety of reasons. Use it as evidence to satisfy HMRC that the property is now actually owned in unequal proportions.Split to your needsA Tenancy-in-common Declaration is usually used when you would like to change the proportion of ownership from an automatic 50:50 split under a joint tenancy. Therefore if you sever a joint tenancy you will need to use this document instead.This declaration should also be used...
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