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    • roasty79
    • By roasty79 13th Jun 17, 10:12 AM
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    roasty79
    Capital gains tax ??
    • #1
    • 13th Jun 17, 10:12 AM
    Capital gains tax ?? 13th Jun 17 at 10:12 AM
    Please can someone provide some advice.

    We are buying a property that needs complete modernisation, the initial attractiveness to this property was that the vendors had gained planning permission at the end of a large garden - so we thought great buy the house - sell the land and then have the money to pay to do it up! We have since realised it's not so simple!

    We are looking to buy the house and then the land as 2 separate plots to allow us to sell on the land, the house we will be buying with a mortgage . Our question is will we have to pay capital gains tax on the land?

    Thanks for all help
Page 1
    • Keep pedalling
    • By Keep pedalling 13th Jun 17, 10:40 AM
    • 3,584 Posts
    • 3,854 Thanks
    Keep pedalling
    • #2
    • 13th Jun 17, 10:40 AM
    • #2
    • 13th Jun 17, 10:40 AM
    If you are buying the land as a seperate plot, and you make a profit over £22,600 (I am assuming it is bought jointly, so you have 2 lots of annual allowance to play with) on the resale then you will have CGT to pay.

    If you are buying this as a single package and you are making this your primary residence then providing the property is not over 0.5 hectare in size you should be able to avoid CGT.

    If you are planning to developer the land yourself than that is a whole new ball game.
    • roasty79
    • By roasty79 13th Jun 17, 10:42 AM
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    roasty79
    • #3
    • 13th Jun 17, 10:42 AM
    • #3
    • 13th Jun 17, 10:42 AM
    We would be buying it jointly as a separate plot for about 25-40k and aiming to get a resale of approx 125k ?
    • 00ec25
    • By 00ec25 13th Jun 17, 10:47 AM
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    00ec25
    • #4
    • 13th Jun 17, 10:47 AM
    • #4
    • 13th Jun 17, 10:47 AM
    We would be buying it jointly as a separate plot for about 25-40k and aiming to get a resale of approx 125k ?
    Originally posted by roasty79
    then "we" will have a large CGT bill on a gain of 125 - 25 (and associated legal fees etc) = 100k which "we" own as 50/50 ?

    each person has a bill of: 100/2 = 50k - 11,300 = 38,700 payable at 18% and/or 28% depending on the tax status of the individual person
    • Keep pedalling
    • By Keep pedalling 13th Jun 17, 10:47 AM
    • 3,584 Posts
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    Keep pedalling
    • #5
    • 13th Jun 17, 10:47 AM
    • #5
    • 13th Jun 17, 10:47 AM
    We would be buying it jointly as a separate plot for about 25-40k and aiming to get a resale of approx 125k ?
    Originally posted by roasty79
    I am puzzled, if you can get £125k for the plot, why are the current owners Not asking the same?
    .
    • roasty79
    • By roasty79 13th Jun 17, 11:02 AM
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    roasty79
    • #6
    • 13th Jun 17, 11:02 AM
    • #6
    • 13th Jun 17, 11:02 AM
    Yes we have wondered this too but we think that they intially wanted to sell as one plot as the house needs major repair and that they would gain more by selling it together! I think they would struggle to sell the house on its own
    • Cakeguts
    • By Cakeguts 13th Jun 17, 11:17 AM
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    Cakeguts
    • #7
    • 13th Jun 17, 11:17 AM
    • #7
    • 13th Jun 17, 11:17 AM
    Yes we have wondered this too but we think that they intially wanted to sell as one plot as the house needs major repair and that they would gain more by selling it together! I think they would struggle to sell the house on its own
    Originally posted by roasty79
    This doesn't make sense in terms of finance. If the plot is worth £125k and they sold it for that they could afford to take a bit less for the house. The point is that everything has its price. The plot is worth what they are selling it for not what you think it is worth because if you think you can repair the house on the plot money they could have done that as well.
    • roasty79
    • By roasty79 13th Jun 17, 3:25 PM
    • 43 Posts
    • 5 Thanks
    roasty79
    • #8
    • 13th Jun 17, 3:25 PM
    • #8
    • 13th Jun 17, 3:25 PM
    We agree! We initially put an offer in to include everything ( house and building plot) as vendors didn't think they would sell the house without it! The issue is our mortgage offer has come back refusing to include the building land so and the valuation is much lower than our quote ( by 60k) !
    So trying to look at our options ! We would be prepared to buy the house on its own without the building plot but would knock off even more than the valuation as I think they will struggle to sell!
    Hence lo King at options to purchase the land separately and then sell on but I think this looks far too expensive!
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