With the Autumn Budget set for 26 November, many UK property and landowners are starting to ask: could selling land for development unlock valuable tax relief?
Whether you’re considering a sale now or simply assessing future options, it’s worth understanding the key tax terms that could feature in the Budget and impact your decision. Selling land can take time and it’s important to know what to listen out for in the Budget and how changes announced may benefit you:
1. Capital Gains Tax (CGT)
Tax on profits when you sell an asset. Current rates for nonresidential land range from 18% to 24% depending on your income band.
2. Business Asset Disposal Relief (BADR)
If you’re actively farming land growing crops, raising livestock, etc. you are carrying on a trade, and the land is a business asset. On disposal (sale or gift), you can generally claim BADR on any capital gain, provided:
- You’ve owned the business for at least two years before disposal, and
- The land is used in that business right up to the point of sale or cessation.
BADR allows qualifying individuals to pay just 10% CGT on up to £1 million of gains. However:
- → From 6 April 2025, the rate increased to 14%
- → From 6 April 2026, it rises further to 18%
3. Business Asset Rollover Relief
If you sell business land and reinvest the proceeds into qualifying “new” business assets within a window (1 year before to 3 years after sale), you can defer CGT until those assets are sold.
4. Private Residence Relief (PRR)
Given this backdrop, accelerating a sale now could help you maximise available reliefs before any new tax hike takes effect.
Farmers & Private Homeowners: How This Really Works for You
Farmers: Selling farmland for development could qualify for BADR, especially if the land is currently used in trading activities. Read the full rules for claiming here: Business Asset Disposal Relief (Self Assessment helpsheet HS275) – GOV.UK Even with upcoming BADR rate increases, you’re likely to pay less CGT than standard rates, especially if structured properly.
By reinvesting the proceeds into another farm, woodland or even commercial assets, you may be able to defer Capital Gains Tax entirely through Rollover Relief. This not only provides breathing room for your business to adapt and grow, but also allows your land to continue supporting your future, in a new and potentially more rewarding way.
Private Homeowners: Love your home but no longer want the upkeep of a large garden?
Thinking about helping your family financially now rather than later? Selling a portion of your land could be a smart, timely move, unlocking value while keeping your tax exposure low. Land sold as part of your main residence may escape CGT altogether through PRR, especially if the plot is modest or has been in your personal use.
Now is the time to start thinking about your options, so you are fully informed to consider all the options in detail once the Budget is announced. With CGT reliefs still accessible but under pressure, early planning with the guidance of a tax adviser could safeguard maximum benefit.
If all this sounds overwhelming. Let’s talk! We have supported countless landowners through the sale process, and our team are always happy to share their expertise so you can make an informed decision that is right for you. Connect with Muller to explore how you can harness the current tax environment, maximise reliefs and plan your future with confidence.
Disclaimer: This content is for informational purposes only and not formal tax advice for selling land for tax relief. Please consult a qualified tax professional to discuss your personal circumstances.
