Ask an expert: Disposal of agricultural property gifts

Question

A farmer aged 76 years with substantial farming property which he had actively managed gifted his farm in Gloucestershire to his son on 15 June 2010. The son was also a farmer in his own right in Kent. The farmland was worth £1.8m when gifted but father claimed business asset holdover relief and it passed to the son at cost price of £750 000. The son wants to sell the farm and buy another ideally but not necessarily closer to home. He wants to know the main tax traps he could fall into particularly as his father is in poor health.

Answer

There are two key capital tax issues...