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bigduckontax
bigduckontax, Accountant
Category: Tax
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I bought a small plot of land for 35000 a few years ago and

Resolved Question:

Good morning
My name is Alex
I bought a small plot of land for 35000 a few years ago and built a small office building on it.Now I'm selling it for 150.000.It is completely self built,for I'm a builder myself.How should I calculate my capital gains?
Thank you
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello Alex, i am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Calculate the cost of the building at market value as at building date, add it to 35K and the difference between that and 150K is your capital gain. Deduct your non cumulative Annual Exempt Amount (AEA) of 11.1K leaves a sum exposed to Capital Gains Tax (CGT) at 10% or 20% or a combination of the two rates depending on your income including the gain in the tax year of disposal.

I do hope that you have found my reply of assistance.

Customer: replied 1 year ago.
Hi Keith
How can I calculate the cost of building at market value?And will that include the cost of materials?
Expert:  bigduckontax replied 1 year ago.

With respect you are a builder so you should be able to estimate that cost and, yes, materials are included.

Customer: replied 1 year ago.
How should I price my labour?Should I use any average numbers in the industry?
Expert:  bigduckontax replied 1 year ago.

Yes, that would be appropriate.

Customer: replied 1 year ago.
What if they ask for proof of labour costs?
I can only show the bills for materials
Expert:  bigduckontax replied 1 year ago.

This is most unlikely and would only occur were HMRC were to make an investigation, which is not much of a possibility these days. You would then show them the figures based on average industry prices. You should keep a record of how you calculated these to maintain with your materials bills.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.

Thank you for your support.