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Sam
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Selling house to developer and tax!

Resolved Question:

I am about to sell my house to a property developer for a sum of money. I am also getting £?????? extra on top of my house price. Do I have to pay tax on this amount?
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your question
Have you lived in this property throughout the whole period of ownership, and may I ask why the property developer is paying over the market value.
Thanks
Sam
Customer: replied 2 years ago.
The developer is also paying moving costs and legal fees to our solicitor
Expert:  Sam replied 2 years ago.
Hi Marc
Thanks for your response, and has this property been where you lived throughout the whole period of ownership?
Thanks
Sam
Customer: replied 2 years ago.
We have lived in our house for 8 years. We were asked to sell it to the developer 3 years ago. It will be knocked down to make a road in to the new estate. The house is going for market value but the extra £?????? Was an extra incentive to sell it to him and sign an option agreement to sell only to him
Expert:  Sam replied 2 years ago.
Hi
Thanks for the additional information
But I need to know if this has been your home throughout the period of ownership (so you did not move out and live somewhere else, or move out and rent it out to tenants)
Thanks
Sam
Customer: replied 2 years ago.
No. It has been our only home. No letting out extra. Family home since we moved in about Nov 2006
Expert:  Sam replied 2 years ago.
Hi
Thanks for your response
Then there is NO capital gains to worry about, the fact you are receiving over the asking price, will have no bearing, as the additional money is by way of compensation from the property developer to secure a sale , and this has no tax consequence on you at all.
Plus the fact its been your only and main residence throughout the ownership of the property, means all profits from the sale are covered by private residence relief, which sees a property, that has been your home throughout, exempt from capital gains.
Thanks
Sam
Sam, Accountant
Category: Tax
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Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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