New build - questions on the profit?

[gcltd]

Hi, I'm building another house on to my existing house, once built and sold would the profit be capital gains tax or income tax? What is the best way to handle this? I've heard many ways inc claiming vat back etc? Any help appreciated.

 

[joinerjohn]

I'd have thought it would be liable for CGT as it's not your main residence. I also think you have to be in your main residence for a certain period of time before CGT isn't paid. So unless you actually live in both houses (once built) the taxman will be rubbing his hands together.

 

[gcltd]

Hi, thanks, after looking further it looks like it may be income tax I'll book in with sn accountant to look in to the way forward and possible claiming vat back etc, what ever is the most cost effective route. Thanks again

 

[theoldun]

New Build.
You can claim your VAT back on completion, on materials, but not on plant hire, lorry hire, tool hire or scaffold hire. The way round that is to employ a VAT ground worker, who will pay his VAT and claim it back in the normal manner but he will not charge you VAT on a new build house. The same goes for the scaffolder and any other trades you employ that are VAT registered.
Would suggest that you do an NHBC Solo to obtain a NHBC certificate. Also do your building Regs with NHBC at the same time. Makes life a lot easier.
HM Customs and Excise.
You should be hit with CGT, but if the same 3 year rule still, applies that we have worked to in the past, you are in a fortunate position that the land you are building on is owned by you, then there are ways round this that could overcome CGT or reduce it a to an easily affordable amount. Would take me to long to explain on here, but a good accountant will be able to explain it to you. It all revolves round your main residence and part of your garden.
Regards oldun

 

[gcltd]

Hi,

Is this an option, new build is 50% new 50% existing house (I'm creating two semi's from detached).

The part of the old house that is the new build has the original gas mains and electricity meters.

If I leave these to feed the new extension/house and connect the main part of the house to new gas/elec then could the new'ish build/extension be classed as my main residence as its part of my house and keeps the old services, therefore no CGT/income tax and I keep the remaining house but connect new services and supply it with a new door number?

Does this make sense?

Many Thanks

 

[theoldun]

Hi, I'm building another house on to my existing house, once built and sold would the profit be capital gains tax or income tax? What is the best way to handle this? I've heard many ways inc claiming vat back etc? Any help appreciated.

This was your first post to which we answered

Your second post read,

Hi,

Does this make sense?

In a nut shell NO, however site plan may make sense. Possibility of avoidng CGT though. See decent architect and accountant.
Regards oldun