Self build VAT refund and Capital gains

Lukejordan

Hi we’ve recently purchased a property with a plot on the Side of it .

It’s our first home and we would like to build the new house and sell both eventually . What would be the best way to do this ( if we can ) without paying any gains . Also can we still claim the vat back on the new build ?
We are happy to sell the original property and move into the new build .

Doozergirl

Yes you can claim back the VAT - there are strict rules on what is zero rated and how you claim it, so research it carefully!

Selling the original and moving into the new one shouldn't trigger Capital Gains on the first house as it was your main home and if the next one is planned as a long term/forever then you do genuinely need somewhere to live as your main home in the meantime. It's neither an investment nor is it trading (triggering income tax).

POPPYOSCAR

Our builder claimed back the vat for us.

ProDave

POPPYOSCAR wrote: »

Our builder claimed back the vat for us.

If self building, then any "supply and fit" work done for you, e,g a builder building a basic shell for you to finish, should be charged to you at zero VAT.

It is only things you buy to incorporate into the house, that you will have to keep all the VAT receipts for and reclaim the VAT at the end of the build.

POPPYOSCAR

ProDave wrote: »

If self building, then any "supply and fit" work done for you, e,g a builder building a basic shell for you to finish, should be charged to you at zero VAT.

It is only things you buy to incorporate into the house, that you will have to keep all the VAT receipts for and reclaim the VAT at the end of the build.

As I said our builder did all that for us.

comeandgo

I take it your builder acted as your book keeper rather than claimed the vat back himself? Your post is unclear and may confuse others. No business can claim back VAT unless they pay or have paid the invoice and it's in their name.

Lukejordan

Im going to be doing all the buikding work myself . I will only be claiming the vat back on the materials I purchase . I was informed by someone that as there will be a second house on the property the vat could not be claimed and gains woukd also apply ? It seems like I may have been informed wrongly about the vat ? But I!!!8217;m unsure if there is a way I can avoid any capital gains ?

Doozergirl

comeandgo wrote: »

I take it your builder acted as your book keeper rather than claimed the vat back himself? Your post is unclear and may confuse others. No business can claim back VAT unless they pay or have paid the invoice and it's in their name.

In that case the builder buys everything in their name with the 20% and charges it on to the client at zero. The whole project is a supply and fit one.

00ec25

Lukejordan wrote: »

It seems like I may have been informed wrongly about the vat ? But I!!!8217;m unsure if there is a way I can avoid any capital gains ?

if you intend to DIY/ self build then spend some time in learning the rules yourself so you won't have to rely on hearsay from others

these are THE rules:
https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction

https://www.gov.uk/vat-building-new-home