I AM A SELF BUILDER ORGANISING A CONTRACTOR TO BUILD TWO NEW BUNGALOWS STARTING NEXT WEEK I HAVE BEEN TOLD BY HMRC THAT I CAN QUALIFY TO ZERO RATE THE VAT ELEMENT ON THE BUILD COSTS AS MY WIFE AND I ARE MOVING INTO ONE OF THEM AND A CLOSE FAMILY MEMBER IS MOVING INTO THE SECOND ONE. WHAT THEY CANNOT TELL ME IS DOES THE PROPERTY THE CLOSE FAMILY MEMBER MOVE INTO HAVE TO BE UNDER THEIR OWNERSHIP AT THE LAND REGISTRY AND ALSO AS MY WIFE AND I ARE FUNDING THE WHOLE PROJECT DO WE TRANSFER THE MONEYS FOR BUILDING COSTS FOR THE SECOND BUNGALOW INTO THEIR NAME OR CAN WE FUND THE PROJECT DIRECTLY WITH THE CONTRACTOR. I WOULD APPRECIATE HELP AS I HAVE ASKED MY ACCOUNTANT MY SOLICITOR AND HMRC WITHOUT A SATISFACTORY ANSWER AND DO NOT WANT PROBLEMS AT A LATER STAGE. THANKYOU

Comments
  • Mark Brinkley

    The good news for you is that the VAT situation has nothing to do with end use or ownership. It’s applicable to all new builds.

    Where end use does matter is the newly announced exemption for selfbuilders from Community Infrastructure Levy. It sounds to me as though you will qualify for that as well. Apply to your local council for the CIL selfbuild exemption forms.

  • Lindsey Davis

    In addition to what Mark said about CIL exemption, it is essential that you apply for this before ANY building work commences, so if planning has been granted I suggest you apply now.

    I think (and I’m only going off what has been announced so far) you and the family member will need to apply as part of the exemption involves proof that you are living in the house, and of course you can’t occupy both. In which case your family member will probably have to take ownership of their bit of land so that it can be classed as their self build project to be eligible for CIL relief.

    Hopefully all local authorities have been briefed on what to do in these situations and will be able to advise.

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