GSC GraysGSC Grays

Contact our offices

Main office


01748 897 630

Estate Agency Offices are located in


Residential Management Team

01748 829210

Proposed Capital Gains Tax changes to “significantly” impact farm sales

Proposed Capital Gains Tax changes to “significantly” impact farm sales

John Coleman, Head of Farm Agency at GSC Grays, is warning that proposed changes to Capital Gains Tax (CGT) could have a significant impact on the sale of farms and farmland.

The CGT allowances are currently set at £12,300 which means no tax is paid on the first £12,300 of gain made on the disposal of an asset. The Chancellor has already indicated that this will be reduced to £6,000 in April 2023 and further reduced to £3,000 in April 2024.

John Coleman said: “It is a fair assumption that the Treasury will be going after additional revenue through increasing Capital Gains Tax whether it be under a Conservative or a Labour Government.

“These changes may inadvertently impact the price achieved for farmland if rollover rules are not similarly amended. This would give a buyer, with funds to roll over, significantly greater buying power if the prime motivation is to reduce their tax bill. “

Ahead of potential changes, John Coleman is urging farmers to start preparing for higher rates of CGT now and added: “To achieve the optimum sale price, farms are typically best marketed in the late spring or summer when the land is most accessible, and everything looks at its best.  Assuming an open market sale, the process from engaging an agent, marketing the property, agreeing on a sale and completing the legal contracts, can take six to nine months.

“For those that want to make the most of the current favourable rates our advice is to start preparing now before higher rates of  CGT significantly impact returns from any disposal.

“Currently funds raised from the sale of a business asset can be rolled over into the purchase of another business asset, deferring a CGT payment until the next sale.  This will potentially give those who have money to roll over 50% more buying power than a bidder without rollover and could significantly distort the market.

“There is no sign that this will change in the short term but there is also no guarantee that this will not happen in future. “


CGT change examples:


  • The disposal of a block of 100 acres of land bought for £500,000 and sold at £10,000 per acre resulting in a capital gain of £500,000 would incur a CGT bill  for a higher rate taxpayer now of: Gain – £500,000 Less – £12,300  Total – (£487,700 x 20%) = £97,540
  • If the rate is raised, as Labour has warned, to 50%, the tax liability will increase to: Gain – £500,000  Less – £3,000  Total – (£497,000 x 50%) – £248,500. This is an increase of £150,960 on the same disposal.
  • In the same scenario of 100 acres of land with a 1982 value of £1,500 per acre, this would make the capital gain £850,000.  At 50% this would incur a bill of £425,000.  An enormous uplift.
John Coleman - GSC Grays

Article by

John Coleman

Get to know John

Latest News