capital gains tax

[thundercrack]

if I build another house in my garden, how does capital gains tax work? or if I sold off the land for building would it be laible to cgt. or should I sell the main house (existing) first, then build or sell on the plot?
thanks, alf.

[almcd007]

As I understand it - the capital gains will be payable on the amount of money you receive for the land sale. As originally the main house and land were one plot, you'll be splitting the plot, thus gaining from what you sell. There would be no CGT when you go to sell the house.

If you sell the main house with all the relevant planning permisision - no CGT should be payable.

If you build the house on the land and then sell the house then CGT would be payable on that house as it's not your main dwelling.

There are ways around it - it's common sense but I can't advocate that. It all depends on the figures - you have to do some homwework on them.

For instance with the figures - if you sell the house it will have a value of for arguments sake �100k if you sell the land and split the plot the plot might have a value of �50k. However it doesnt mean to say that if you sell the house with the planning for the new house the automatic value of the house plus land would be �150k. You need a good valuer to come and value all the options.