A higher rate farming client has been approached about development of an unused parcel of land. The developer has proposed a couple of options. Can you briefly explain the potential tax consequences of each one?

Option 1 – Purchase the land outright from the farmer.

Option 2 – Developer acquires the land for a lower value, but as an incentive will offer a percentage of the properties developed on land when they are sold at completion, but the farmer will not be involved in any of the trading activities.

He also has unused land doing nothing in a corporate structure so the has developer has offered to purchase the shares if planning permission is obtained, therefore could you also explain the tax treatment?