MPs representing Buckinghamshire constituencies have written to the Treasury to back the CLA’s call to reform tax relief on land that is compulsorily purchased for major UK infrastructure projects like HS2.
Cheryl Gillan MP for Chesham and Amersham; David Lidington MP for Aylesbury; and Dominic Grieve MP for Beaconsfield are among the signatories to the letter to the Treasury.
The CLA, which represents landowners, farmers and rural businesses, approached several MPs asking for support for its tax reforms to make the compulsory purchase system fairer.
Under existing Capital Gains Tax (CGT)rules if a landowner uses the money received from land that has been compulsorily purchased to buy other land they are entitled to relief. However if they choose to use the money to pay for replacement building on land they already own they have to pay CGT before making necessary reinvestment.
CLA Director South East Robin Edwards said: “Families affected by compulsory purchase in Buckinghamshire face major worry and uncertainty often over a number of years. The whole system is in urgent need of reform. A good first step would be to allow people flexibility to invest in replacement property without fear of being hit with a large tax bill."
Mr Edwards added: “We also want to see an extension to this so landowners affected are eligible for the relief for longer and so have a realistic timeframe to plan a sustainable replacement for the land or property lost to compulsory purchase.”
MP for Chesham and Amersham Cheryl Gillan said: “I, and several of my colleagues fully support the CLA’s reforms to Capital Gains Tax relief. As an MP for a constituency badly affected by HS2, I have seen the trauma experienced by those whose livelihoods are put at risk. All they want is to find a way to continue running their business in a viable way but the current tax rules stop them from doing this.”
Other MPs to have signed the letter include the Attorney General Jeremy Wright QC MP and Caroline Spelman MP, Former Secretary of State for Defra and MP for Meriden.
The Prideaux family’s farmland near Quainton includes a lodge, currently let to a tenant, which would be demolished to make way for HS2. It would be impossible to rebuild the property on existing land without paying a huge bill for Capital Gains Tax.
Chancellor George Osborne announced in the Autumn Statement last week that the Government would publish proposals to make the compulsory purchase system fairer in the 2015 Budget. The CLA will continue to press the Government for reform of Capital Gains Tax relief to be included in these proposals.
Read the letter to the Treasury signed by:
Jeremy Wright QC MP – Attorney General and MP for Kenilworth and Southam
David Lidington MP – Minister for Europe and MP for Aylesbury
Cheryl Gillan MP – Former Secretary of State for Wales and MP for Chesham and Amersham
Caroline Spelman MP – Former Secretary of State for Defra and MP for Meriden
Dominic Grieve MP – Former Attorney General and MP for Beaconsfield
Nick Hurd MP – Former Minister for Civil Society and MP for Ruislip, Northwood and Pinner
Dan Byles MP – MP for North Warwickshire
Jeremy Lefroy MP – MP for Stafford
Capital Gains Tax is a tax on the profit when you sell an asset that has increased in value. The gain made is taxed, not the amount of money received. Read more about CGT on the Government website.