The HS2 project is one of the most demanding and exciting transport currently active in Europe. The project has set out to build a railway that will form the new backbone of Britain’s transport network.
The design means that some individual’s property falls into the track of the future railway. As a result compulsory purchase orders are at play for many landowners. The landowners will therefore receive significant sums to compensate land affected.
Although this is great news for many, there are definite limitations. Any disposal of land above a certain threshold will often rise to Capital Gains Tax. Non-corporate landowners are likely to have CGT charged at between 20% and 28% of the difference between the capital payment received and the acquisition cost.
In this scenario, immediate CGT liability has been limited against by statutory provisions, providing that any sum received is under the compulsory purchase order is reinvested into other land and property.
If the proceeds from the land sale are over £20,000, the rollover relief provision has been introduced to prevent immediate CGT liability. There are a number of conditions that must be fulfilled in order to quality for the rollover relief.