Selling some of your Land

The National Presdient, Derek Dormer, and Union accountancy lecture Bill Robinson have the following advice about the possible tax liability when a club disposes of a parcel of land it owns. The steps the club should take are:

1. appoint a professional valuer or surveyor to ascertain the market price of the land as it was when they purchased it;
2. establish the difference between that price and the figure received by the club. This is the basis for tax liability;
3. as the Inland Revenue toapply an infaltionary figure onto the 1982 Assessment and deduct this from the taxable figure;
4. the club should also claim the cost of the valuation and the legal cost of the actual sale from the taxable figure to arrive at a net figure of taxable profits;
5. this tax is usually applied at around 10% of the remaining factor but this can rise to 19%. If the land is of a significant size then there will be a different formula which youshould be able to get from your auditor or accountant.

May 2003