TAX on Self Build in Garden and on same title?

by Readers Question

3 months ago

TAX on Self Build in Garden and on same title?

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TAX on Self Build in Garden and on same title?

I am living in a house for last 5 years that have large garden and recently got Planning for building another similar house in the garden.

I want to build the new house as self build and move in to it as my PPR.

Once I moved into new house I want to renovate the current house with a bit of extension and rent it out.

No intention to sell any one of them in short term.

What are the TAX implications on this situation?

Also the current house have 1 land registry title with the garden and new house is part of the garden.

Do I need to split the title separately?

If I need to split – when do I need to do that and will I be having any TAX implications?

Many thanks

Sudeer



Comments

Neil Patterson

3 months ago

Hi Sudeer,

One of the first things to check with the council if you haven't already is how much they will charge you as a local tax for creating a new dwelling. This can vary greatly between areas.

If you need to finance the build you are likely to have to create a new title to provide security for the lender and if you do want the flexibility to sell.

You need to consider CGT as you already are by considering PPR relief, and VAT.

See >> https://www.gov.uk/vat-building-new-home

>> https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2017--2

I would strongly suggest you employ a good accountant from the start.


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