Tax liability on demolishing family home and building 2 new houses?

Tax liability on demolishing family home and building 2 new houses?

10:52 AM, 18th March 2020, About 5 years ago 2

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I have just gained planning permission to demolish my family home and attached granny flat and in their place build 2 x new 4 bedroom detached houses. My family have lived in the house for 38 years and the granny flat is now 30 years old. My eldest daughter now lives in the granny flat as her PPR.

It is our intention to live in one of the new houses and sell the other one to pay for the development and hopefully top up my pension with what is left over. My daughter will find somewhere else to live.

My question is what will my tax liability be on any profit from the development. I have discussed this with an accountant, but he isn’t sure of my liability, he thinks I may be liable for income tax rather than CGT.

It has also been suggested that I set up a limited company and sell the land to the company, but wouldn’t we then have to pay stamp duty?

The local council who have approved the development have accepted that as a self build on one of the properties and the rest of the development being under 100 sq mtrs increase we are not liable for CIL.

Anyway thank you in advance for any help and advice you can offer.

Bill


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Mark Alexander - Founder of Property118

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13:45 PM, 18th March 2020, About 5 years ago

Dear Bill

You will need to obtain advice on this subject from an accountancy practice specialising in property development, which falls outside our sphere of expertise.

The accountancy firm I recommend is Pacific Limited Chartered Accounts based in Norwich. Distance is not an issue with modern technology, bear in mind I live in Malta! I have been recommending them for over two decades and during that time I have introduced them to over 1,000 property investors and developers just like you. Accordingly, they specialise in property-based accounting and are experts in their field. They are a medium sized boutique accountancy firm and being based in provincial Norwich their pricing is very reasonable, especially when comparing them to the larger firms or London based practices. They certainly aren’t the cheapest, but they do provide excellent value for money, which is what is most important in my opinion. The best people to speak to in the first instance would be Neil Barlow or Graham Mitchell – Telephone 01603 630684.

BIll

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13:54 PM, 18th March 2020, About 5 years ago

Thank you Mark your recommendation is very much appreciated

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