Capital Gains & Value Added Tax

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Discussion started by Kevin Burton
Started on Sun, 07/03/2010 - 20:44

I have recently received planning consent to build a house in my garden and will move into the property on completion; I will be selling my current property in the mean time.

How long do I have to live in the property to avoid paying capital gains tax or having to refund my VAT?

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Re: Capital Gains & Value Added Tax

Bill Ta'few (not verified)
Mon, 08/03/2010 - 07:22
Bill Ta'few's photo

There is no specified minimum time, it all comes down to intentions.

If you only stay in it for a short period of time then you must be able to convince HMRC that it was your genuine intention for the house to be your PPR, but circumstances changed.

I'm afraid I can't quote you any case law for examples, if anybody else can I'd be intrigued to read them.
But if for example your original house was a 4 bed detached and you built a 2 bed property in the garden that you, your wife and 3 kids moved into for a week before moving onto another 4 bed detached then I think you'd struggle to convince HMRC that it was always your intention to live in the new build permanently.

If you are deemed to have built the house for profit then technically you'll be liable to Income tax on the profit not CGT. Although if you are trying to claim it was your PPR and did briefly live in it then you might get away with CGT.

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