Capital gains on property to buy, renovate and sell

ds1980

seems about right to me.

Id say get away with what you can!

If you move in for a day then as far as i know there's no cgt!??!?!?!

Good luck with it all sounds lie a great plan.

I laughed before id read about the land bit but all should be fine.

PS where is it

silvercar

If you move in for a day then as far as i know there's no cgt!??!?!?!

I would suggest 6 months, changing address with bank, utilities etc. Letting your current home would also convince the revenue that you have moved.

Williams_Daddy

Thanks Silvercar
Sounds like they won't put it down to trading - I'm pretty sure this is a one off anyway - really can't see this sort of opportuntiy poppong up again.
I've got to sell house 2 in this tax year (if I don't sell it in 6 months, we run out of money to pay the enormous mortgage!) and I suspect that house 3 could be built and moved into and sold in 2008.
So that must mean that we could use both our allowances against the profit on house 2 in this year and then we build house 3, rent house 1, move in to house 3 for a couple of months, sell it, move back to house 1 and then start a new thread "Please help me with what to do with all my lovely money now that the Chancellor hasn't got a penny off me!"
In answer to your question DS1980, it's in leafy Middlesex suburbia.
Actually, thinking about it we could move into house 3, and then sell both house 1 and house 3 at the same time and still avoid CGT because house 1 is being sold within 3 years of moving out - is that right?

silvercar

Actually, thinking about it we could move into house 3, and then sell both house 1 and house 3 at the same time and still avoid CGT because house 1 is being sold within 3 years of moving out - is that right?

Correct, though personally the idea of moving house to save tax is so painful. I would sell the land to a builder and avoid the hassle of building the house and of moving!

ds1980

Cool, my neck of the woods. Good luck to you.

Williams_Daddy

ds1980 wrote: »

Cool, my neck of the woods. Good luck to you.

Thanks very much!

Williams_Daddy

silvercar wrote: »

Correct, though personally the idea of moving house to save tax is so painful. I would sell the land to a builder and avoid the hassle of building the house and of moving!

I know what you mean - moving house 2nd only to divorce in stress and all that. But if I sell the land, I can't avoid 40% on £220K and that means we walk away with £130K ish. But if I build the house, move in, sell it and avoid the CGT then we walk away with about £400K! Crikey, I reckon I can put up with any amount of stress for that!
Anyway, how hard can it be building a house from scratch - I'll just read a few books...

silvercar

How much could you sell the land to a builder for?

Then calculate the cost of building the house (and 20% as these things often cost more). How much would the land + house sell for? Is this much greater than just the land? Now allow for the time that the money could have been earning interest for you if you had sold the land alone. Then take off any loan costs in funding the building work. Now add 2 lots of removal costs and other sundries so you can make it your home.

Now compare the 2; and I haven't even got to the tax position yet! or the hassle factor!