Capital gains tax liability?

#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
mark1234 said:
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?
This is all tricky stuff, there is a general questions forum on accountingweb.co.uk 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.
 

Sixty

ADC
Moderator
Book Reviewer
#3
No specific knowledge of this situation M1234 but the following may be useful?

Any gains made from your Principal Private Residence (PPR) are exempt from Capital Gains Tax (CGT), if the property has been your main home or residence and the total holding is not more than half a hectare (1 hectare = 2.2 acres). While no time limits are in place to have a minimum occupation period, there does need to be a genuine reason to be moving and any proceeds from the sale must be rolled over into the new home.

The decision will be based on your motivation for moving - which must not have been to make a profit, only to provide a home for you and your family. If you do make a regular habit of moving house, and if you cannot demostrate another viable income source, the Revenue could deem that you were trading and charge you Income Tax and/or Capital Gains Tax
From here.
 
#5
school_for_scoundrels said:
mark1234 said:
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?
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.
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.
 

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