Thanks for answering my questions, I just wanted to clearer on a few points:
For option 1 (ie 2 new builds)
You advised that it's the value of the land and build cost – would that be the value including the current house on it? (I assume done by some RICS person)
Are these calculations correct as an example:
£600 000 (value of current property as a whole, land and house at time of demolishing for new build)
£180 000 X 2 build cost of 2 new detached homes
Sell for £600 000 each home
So for new 35 house I will be liable for £600 000 (sale price) - £180 000(build cost) - £300 000 (half of original property price, which is split in two equally) = £120 000
I assume if I sell immediately it will be treated as a development and taxed as income (40% as I am a higher rate tax payer), but if I rent it out it will be an investment and when I do sell it I’d pay capital gains tax on the £120 000?
For 35A I will move into – so I won’t be liable for any of the above?
For option 2
I have been told that as I am doing a fair amount of work on the existing 35 (i.e. going into loft and adding value) this portion of extra work will not be part of PPR but I can see you suggest it will be. 35 will still be owned by me until I move into the 35A so it will be a straight move, but I would have had to move into temporary accommodation while the renovations are taking place, only for 3 months though! I am a bit worried about that though. Do you think I will be ok?