Capital gains tax liability?

Discussion in 'The Intelligence Cell' started by mark1234, Jun 7, 2010.

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  1. Excuse a bone question, I'm mostly ignorant of CGT and I've tried googling the answer but can't find answers to the questions.

    Are you liable for capital gains tax on a self build?

    If so, does it take into account labour,planning, equipment and materials to come out of your profit?

    If you were to live in the house that you've built to not make it liable for CGT is their restrictions on how you spend the money on sale of the house? for example does all of the profit have to go into buying a new residence and any left over subject to CGT?
  2. This is all tricky stuff, there is a general questions forum on where accountants ask difficult questions to each other. Your post might get a more informed & qualified answer you could rely on or have more confidence in there. If not somebody will point you in the right direction, even if it is to a colleague who might charge a small fee.

    You really need to get this kind of thing right, from the outset even if you`ve got to pay somebody something to get the right advice.

    If it is any help, that`s what I would do.
  3. Sixty

    Sixty LE Moderator Book Reviewer
    1. ARRSE Cyclists and Triathletes

    No specific knowledge of this situation M1234 but the following may be useful?

    From here.
  4. Thankyou Sixty, that helps answer 2 of my questions.
  5. I think that any accountant would be reluctant to give up advice for free ( not that I blame them).

    So it was just a general question aimed at those who may have experience of CGT.
  6. If you live in the house for a period (six months rings a bell but it may have increased) there is no CGT payable. If you build and sell without living in it then you pay tax.

    Unless you paid yourself a wage when you were building, your labour and your time spent on planning etc are not relievable. All other provable costs are.

    So if you self build record all your time spent working on the project and pay yourself a decent but not excessive wage (the tax people will tell you if it is too much). Record all other expenditure. Live in the house for a period (sell your other house without CGT) an then sell and take the profit tax free.