Capital Gains Tax CGT on plot of land

[Imbera27]

Imbera27 Im in a situation where I am selling a plot of land with planning permission we have had the land for 20 yrs and 50% is my sisters Im looking after fees to get £115000 do I have to declare to HMRC that I have sold it, if not how long do HMRC have to find out and contact me to collect CGT if I dont declare it

[buildersmate]

Yes, you have to declare to HMRC that you have made a capital gain of £115k on your tax return for the year in which you made the gain (the land in which you sold it).
If you don't it is tax evasion and hence fraud.
I don't believe there is a time limit for HMRC to find out - you may get caught out any time up until your death.
You can have around £10k of CG in any year, so take £10k off £115k leaves around £95k. You then pay CGT at 18% of the £95k (unlees you are a higher rate taxpayer, when it will be more than 18%)

[bednobs]

if you tak 10k off of 115k it's 105 k

[magsmay]

If you are making a net profit of £115K is that each (you and your sister) or is that then divided? Both of you can use your CGT allowance which would be around £21K between you I think.

[dzug2]

Is the £115k the price you are hoping to get for it (as others have assumed) or the profit after taking away what you paid for it?

Remember CGT is on the GAIN, not the selling price.

[buildersmate]

Dzug makes a good point, of course - you deduct the original purchase price (or half of it) from your selling price.
Bednobs just nit-picks around the edges around issues she would struggle to answer anyway.

[bednobs]

well that's true, i know nothing about CGT and would struggle to answer the question (hence why i didn't) However, if the op is working it out it might be a good idea to work it out on the right amount.

[Imbera27]

we have been offered £230 so £115 is my share but we have agent fees and solicitors to pay on top of that so Im guess I will walk away with £110 so CGT will be on £100k after allowance. I wasnt trying to puropsly aviod it I was jusy wondering how would they know I had sold it and made money unless I informed them

[buildersmate]

In general they won't know about the transaction until you tell them.

There may, of course, be a department within HMRC tasked with trawling around for such transactions, though it is hard to see how they can separate off those selling land which form their principal private residence (and are not liable to CGT anyway). These will be the vast majority of the land transactions informed to the Land Registry, but you never know what 'investigations' HMRC revenue-chasers are undertaking.

Ignorance of the law is no defence in the event of being caught much later, of course.