Tax implication on selling part of garden?Make Text Bigger
I have one house where I’ve lived for 3 years and 5 months, I am about to move out and let it out. This house has a large garden and has access to main road, I would like to obtain an outline planning permission for this part of garden and then selling the plot off to a builder, then let it out the existing house about 3 – 4 years, then sell the existing house.
The house is in South East and if the planning permission for the land is successfully obtained and sold, it is likely to produce a 6 figures profit. The plot will be “The permitted area”, as it is less than 800 sqm – including the site of the dwelling. I understand if I am selling the land now, the Principle Private Residence relief will apply, no tax to pay.
My intention was to apply for the planning permission then sell the land asap, but the planning application does take some time, so I am thinking about letting it out first, then apply for the planning permission while letting. I will let the prospective tenant know my intention, as I like to be open and honest with the tenant. But because the incoming new tenant does not like to live near building site, while the construction work is at the back of garden I am thinking about delaying selling off this part of land for about 2 years to ensure no construction work during the 2 years tenancy.
My questions are as follows:
(1) If I let out the existing house for 2 years, then sell the part of garden with planning permission. Then wait for another 2 years, then sell the main house. What are the tax implications?
(2) What is best way to avoid paying Capital gain tax on profit of selling the land, while letting out existing house?
(3) What is best way to handle the new tenant concern regarding not wanting to live near a building site?
(4) Should I just try to get planning permission then sell it, rather than letting out? Is this the best way to get maximum return?
Thank you very much in advance.
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