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Capital Gains Tax New Builds
l_a_i_n_e_y
Posts: 7 Forumite
in Cutting tax
Hello everyone, new member and very impressed by what you all know. My question is..... I am thinking of getting planning permission on a part of my front garden. I may be able to build 3 low cost housing homes does anyone know how I stand in capital gains tax????, someone has told me if I rent them for two years I wont pay it????and is the gain the value on completion less build and land cost???? Thanks
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Comments
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If you're building homes you're a builder and should be liable to income tax on your profits, not capital gains tax.0
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Thanks for your reply but Im not a builder........havent been able to sell my home, estate agent suggested getting permission to build in large front garden, having a think as to wether I can afford to get money and build to pay off morgage on my home etc etc, know a builder who I can trust but just dont know wether Its goning to be worthwhile.0
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You will be if you build (or have built for you) properties that you're then going to sell on with a view to profit.l_a_i_n_e_y wrote: »Thanks for your reply but Im not a builder.0 -
l_a_i_n_e_y wrote: »Thanks for your reply but Im not a builder........havent been able to sell my home, estate agent suggested getting permission to build in large front garden, having a think as to wether I can afford to get money and build to pay off morgage on my home etc etc, know a builder who I can trust but just dont know wether Its goning to be worthwhile.
I have already done just what you are contemplating, front garden too, but just one house.
You need to form a partnership with your wife (assuming you have one), register for VAT, and DON'T get a builder involved but get subbies in. Far cheaper and it's so easy you wouldn't believe it.
As for the CG Tax, you'll probably find as I did that using yours and wifes CG allowance you'll be better off than paying income tax at the end.0 -
Hi, kind regards for answering my question...
Got a little ask if you dont mind sharing it with me...can you put some figures in to this for me, ie the build cost to house value, to profit, to tax paid, going on how you managed your build, as i/we have done the costings but are unsure of the ratio of tax we would be liable at end, and by your figures we may be able to obtain at least some 'ball park' figure...thanks0 -
It used to be that the value of the land plus the cost of the build was 2/3 of the final selling price, but that proportion has changed; I can't remember the exact new figures, but there's less profit in it for you (eg land 35-40%, build 35-40% profit 20-30%).
Make sure you don't partition the land off until planning is agreed and it's all transferred on the land registry etc. If it's classed as your garden, and you're just selling the land, then it's not liable for tax, but if it's partitioned before you apply for planning then it's seen as separate from your garden. Obviously, this also applies to if you build yourself, but then you'd still have to pay tax on the profits.
It can actually be less stressful if you project manage the build yourself (DS is coming to the end of a build and has had a useless project manager), just make sure you get quotes etc in writing, so you know exactly what each subbie will do and how much it will cost.0 -
Hi all well it seems a very long time since I asked the question but its only now that the panning has just gone in to the council. I am a single with children person, have a full time job but having watched property ladder till my eyes have bled I have taken the step of if planning is approved,project managing building the 3 attached homes myself!!! I have brought a laptop have a freind on standby to write me a programme which I can put all costs etc straight on so here is going to be the first new question of many I will be asking, what do I need column wise for the records, 3 homes is it individual or the whole project??? what kind of colums do you experts suggest please0
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