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George Olver, Stags Farm Agent, outlines the advantage of selling by auction due to recent changes to Capital Gains Tax.
On 17th November, chancellor Jeremy Hunt set out several measures as part of his Autumn Statement, including notable changes to Capital Gains Tax (CGT).
CGT applies where a profit is made upon the sale/disposal of an asset that has increased in value. The applicable CGT rate/percentage will vary according to an individual’s income tax rate and the asset being sold.
However, individuals and trustees benefit from a set allowance for each tax year, known as the Annual Exempt Amount (AEA). This annual allowance defines the capital gain which can be made before any tax is incurred (having deducted allowable costs and applied any relevant reliefs). In recent years, the AEA has been £12,300 per individual and £6,150 for most trustees.
However, the following changes to the AEA were announced:
For those planning to sell land in the short to medium-term where a substantial capital gain is likely, it would be beneficial to sell before we move into the next tax year, commencing Thursday April 6th 2023.
For clients looking to capitalise on this, the common private treaty method of sale can be used. However, this method does not always bring certainty of a sale exchanging contracts and completing within a certain timescale.
One way to ensure certainty would be a sale by auction. In particular, Stags Online Auctions provides a new way to buy and sell property and land. Retaining all the advantages of a conventional auction with competitive bidding, the online platform runs 24 hours a day, 7 days a week. Properties can be easily listed and there is no need to have to wait to join a collective auction. Buyers can bid from anywhere, at any time and are able to bid within the comfort of their own home in a less pressurised environment, which many prefer.
Properties are marketed in the usual way, taking advantage of Stags’ network, website, property portals and regional/national advertising. In addition, properties are marketed via Bamboo Auctions who provide the auction platform.
If you are thinking of selling and would like advice on the value of your land, woodland or farm, please get in touch with a member of the Stags Farm Agency team on 01872 266729 or 01392 680059 or alternatively email farms.cornwall@stags.co.uk or farms@stags.co.uk.
Disclaimer: We are not qualified Tax Advisors and have to therefore recommend that you do not rely on any of the comments in this article without first checking them with an Accountant.
