CG78110 - Europe: grubbing up scheme: what this guidance is about
This guidance tells you about the Capital Gains Tax treatment of land which has been `grubbed up바카라 사이트™.
Under this scheme apple growers may receive grants in respect of any trees they `grub-up바카라 사이트™, or, in other words, dig up. Such grants are not treated as income in the grower바카라 사이트™s hands, see BIM55165. They may, however, attract Capital Gains Tax liability.
Grants under the grubbing-up scheme are capital sums derived from land, TCGA92/S22. This means that the receipt of a grant will be treated as a part-disposal for Capital Gains Tax purposes, see CG12940+.
Small disposals and claims under TCGA92/S23 (1)
If the receipt is small the recipient may claim to have the payment deducted from the cost of the land, TCGA92/S23 (1)(c). This will have the effect of deferring any tax charge until any later disposal of the land, see CG71870+ You should regard small as meaning the same as in TCGA92/S122, see CG57835.
TCGA92/S23 (1)
If the recipient is not entitled to, or chooses not to, make such a claim, the amount of the gain will be computed under the normal part-disposal rules, TCGA92/S42, see CG12730+. The recipient is entitled to offset part of the cost of the land against the grant received and to a deduction for the costs of grubbing-up.
If a Section 23 (1)(c) claim has not been made and a gain arises on the part disposal, then roll-over relief, TCGA92/S152 - TCGA92/S158, will be available if the consideration received is invested in replacement business assets. The gain will have arisen from a disposal of land which has been occupied and used for the purposes of the grower바카라 사이트™s trade.
Where the land which has been grubbed up is subsequently disposed of, the availability of roll-over relief will depend on the use, if any, to which the land has been put after grubbing up.