Hi I had a small plot retained from the sale of a house in 2006.
Due to planning and English nature this went on the back burner for 9 years. When planning protocol had changed, the neighbour and I put in for planning and was duly passed after time. I purchased her half for 80k which was half the valuation.
The build when finished will be approx 200k.
The amalgamated plot is in my name currently and the build is half finished.
The idea was to move in and be mortgage free.
My situation work wise has now changed from 9 months ago, from being laid off. Now being 56 I am also thinking of calling it a day work wise.
I Also have three properties (Flats) i let mortgage free from purchase in 2009.
I have a mortgage on my main residence of 155k fixed until 2019. So if i rent that for a year and move into the new build will this resolve this problem?
So I suppose my Question is........ if we live there for a year and make it my main residence, then sell it, is it free of gain?
Or should I put it in our joint names and sell after a year as back up insurance? my partner does not have a property.
I also believe as an option I can gift it to my other half? as long as I live 7 years? Then she can sell it tax free?
Seems to be a very grey area due to my change in circumstances, well in general.
I am sure I am not the first person in this situation, and I welcome any advice from an Expert or other readers who have been in this situation or received advice.
Thx in advance. 1st time selfbuilder.
I am afraid the issues that you raise are beyond the scope of a building consultant and you should seek advice from a tax accountant to help your properly plan. My view, if it helps, is that you cannot simply switch your principal private dwelling without accounting for any tax liability on the new asset; i.e. you gained the land 9 years ago from an asset disposal, you have secured planning, bought some more land, built a dwelling and all of that was as a speculator. In order to convert that to your PPD you must first establish its value and that valuation will dictate if there is a potential capital gains liability on reaching this stage of the development. You may find with your portfolio that HMRC actually consider this to be a form of trading, albeit that you are not necessarily disposing of the asset on the open market. I recommend you urgently seek advice from a tax specialist.
Tim Doherty (Build It expert)