Just obtained planning permission to split our garden and build a new 4 bed house. When is it best to divide the land title?

  • Mark Brinkley

    I would think it’s entirely up to you, unless you wish to raise finance on either parcel of land. Then, you would have to inform the mortgage company and they may well want the situation clarified early.

  • Mike Grundy

    Don’t create the new title before you exchange contracts to sell it to the purchaser of the new house. And don’t fence off the new site, or mark it off in any way beyond pegs in the ground (no string between them) until that stage.. The point is this: in order to get Capital Gains Tax Relief on the gain from selling the land that the new house sits on (ie "Principal Private Residence" relief) you have to actually have that land as part of your garden at the very point of exchanging contracts on the sale. Having had it as part of your garden in the past isn’t good enough – there was a court case on this many years ago. You need advice from a good tax accountant who will also guide you through the tax implications of the profit you make from building the new house (ie the profit over and above the added value of your land from getting planning permission).

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