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bigduckontax, Accountant
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Tax implications for demolishing my home and creating two building

Customer Question

Tax implications for demolishing my home and creating two building plots one for sale and one for me to build new home
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
Here is the advice from which:
'Capital gains tax is normally not payable on gains you make on your only or main home, because these qualify for private residence relief (PRR). But all or part of any gain will usually be taxable if:
You develop your home – for example by converting part into flats
You sell part of your garden and your total plot is over half a hectare (1.2 acres)'
So, assuming that your home was your sole of main domestic residence, then Private Residence Relief will apply. PRR relieves Capital Gains Tax (CGT) by 100%.
So having cleared that hurdle providing the total plot does not exceed 1.2 acres (half a hectare) PPR will apply to your site and you will escape CGT on your proposed development.
I do hope I have shed some light on your question.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3613
Experience: FCCA FCMA CGMA ACIS
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Customer: replied 2 years ago.

THANKS

Expert:  bigduckontax replied 2 years ago.
Thank you for your excellent support.

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