Annual exempt amount: exploitation: fragmentation
It is important to recognise that there may be very considerable practical difficulties in establishing that a disposal was made under an oral contract pre-dating the written contract. An unconditional contract requires an offer by the purchaser and acceptance by the vendor. An agreement subject to contract does not amount to an unconditional contract. Nor does an ‘agreement to agree’: for example, the vendor may sell part of the asset now and say he will enter an agreement to sell the rest later. The intention to sell the second part does not amount to an unconditional contract. Furthermore, if the oral contract was followed by written contracts, it will be necessary to demonstrate that the sale took place in accordance with the oral rather than the written contracts: this involves arguing that the written contracts were no more than window-dressing and this will be possible only in very exceptional circumstances. If the vendor grants, in respect of part of the asset, an option for sale exercisable in a later year, we are unlikely to succeed in showing that there was an unconditional contract for the sale of the whole asset in the earlier year.