Swapping land

summereire

Hi, I'm wondering if I swap some land with my neighbour what the tax implications are. They are both slightly different sizes, but the smaller is more valuable than the other in terms of usefulness. Does CAT, CGT or stamp duty or any other tax come into it considering it's an at arm's length transaction?

To follow on from this, if there was other property included as part of the deal such as fencing paid for by one side to make it fairer, or if there was money involved, what would be the status then?

Thanks very much for your experience on this.

Kosseegan

Stamp duty will have to be paid on the value of each newly acquired site i.e. both of them. If the sites are of different values and there is a straight swap there would be CAT on the gift being the difference the two values chargeable on the person who got the more valuable site. If the transaction is balance by money or moeys worth being paid to make up the difference there will be no CAT. there may be CGT depending on the acquisition value and the disposal value. Roll over relief will likely not be available.

summereire

Thanks for that advice

Victor

You really need to talk it out with your solicitor. They may be ways to manage it, practically and legally to minimise costs and maximise benefits, e.g. critically analyse whether each section of land needs to be transferred.

If this stems from a compulsory purchase order for a road or similar, you may be able to have some of your costs paid or tax waived.

If it is being done as part of a development, it may be useful to sell the land directly to the eventual buyer.

summereire

Thanks, good ideas. Yes I'm going to ask the solicitor and the accountant. Neither seems to have the full picture, and I've heard a variety of professional opinions, hence my asking.