How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask taxadvisor.uk Your Own Question

taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4939
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
54961312
Type Your Tax Question Here...
taxadvisor.uk is online now

I am building a additional new property on my land. We live

Resolved Question:

I am building a additional new property on my land.
We live in the existing building which will remain as is.
We live in the existing building ( main home)
I am a higher rate tax payer.
Questions:
1. If I sell the new property am I liable to capital gains tax.
2. I we live in the new building and sell our existing home are we liable to capital gains.
3. If my son who lives with us moves into the new property are we still liable to capital gains.
4. If both buildings are not sold immediately building works finish but are lived in by us, is their a number of years, will tax still be payable.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

[Q]
1. If I sell the new property am I liable to capital gains tax.

[a]
You will be liable to income tax and NI Class 4 and not capital gains tax if you build a new property and then sell it. HMRC would view this as activity of a property developer and not property investor.

[Q]
2. I we live in the new building and sell our existing home are we liable to capital gains.

[a]
If you were to move to the new building and make it your only and main residence and sell your existing home, any gain from sale of existing home would be exempt from capital gains tax as it would be covered by private residence relief.

[Q]
3. If my son who lives with us moves into the new property are we still liable to capital gains.

[a]
Basically, you are liable to capital gains tax on any chargeable gain and gain from sale of this property being a second home would give rise to CG, irrespective of the fact your sons would be living in it...

[Q]
4. If both buildings are not sold immediately building works finish but are lived in by us, is their a number of years, will tax still be payable.

[a]
If you moved from your current dwelling to the new property and made it your main residence and notified HMRC within two years of completion that the new property is your main residence then all the period it remains your main residence your gain would be covered by private residence relief. If you were to sell your present residence within 18 months of moving out, then the whole gain on your present residence would also be exempt from capital gains tax.

More information on private residence relief can be found here

http://www.hmrc.gov.uk/helpsheets/hs283.pdf


I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

Just to clarify.

I move from my existing building into the new building, sell the existing building then no capital gains are due.

I live in the new building for 18 months and then sell and move again no capital gains tax.

Expert:  taxadvisor.uk replied 2 years ago.

Les, thanks for your reply.

[Q]
I move from my existing building into the new building, sell the existing building then no capital gains are due.

[a]
correct ... no capital gains tax as gain would be exempt from cgt

[Q]
I live in the new building for 18 months and then sell and move again no capital gains tax.

[a]
18 month period is additional relief available whether you live in the property or not provided it has been your main residence at some point during the period of ownership. You have to make it your main residence for that time and regard your main home as your secondary property to qualify (assuming you retain both).

I hope this is helpful.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4939
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.co.uk/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.co.uk/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.co.uk/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.co.uk/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions