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Assets for sale? Take time to qualify for relief

This year’s Budget saw a major change to Entrepreneurs Relief. Invaluable to many farmers looking to sell farmland and other qualifying business assets, it now requires much more planning ahead.

The tax planning process may take three to four years in total so early involvement with your professional advisors is essential.

Under this relief, qualifying assets result in a reduced rate of Capital Gains Tax of 10% on the value of the sale, with a limit of up to £10 million during your lifetime. Compared against a maximum of 28% on gains from residential property and 20% on all other assets. As a result, if you’re able to plan for this relief the savings can be huge.

Previously farmers needed to actively operate a trading business on the land for 12 months before disposing of all or part of the business. This has now doubled to at least two years.

Those seeking to sell land will need to allow plenty of time to ensure this condition is met. Where land is rented out, a further 12 to 24 months may be
required to bring the land back in hand.