newhome

Because a neverendum is their only policy.

So you would own the property / plot before you made it your PPR in which case yes you would need to pay CGT I imagine as it wasn’t your PPR for the entire period of ownership so CGT would be due for the period before occupation. Or did you mean something different?

This ruling doesn’t really change any of those scenarios afaik. There are already rules around selling off a garden plot. I don’t think when you put the application in makes much difference tbh. It’s whether it qualifies as your PPR when it is sold that’s important. https://www.taxation.co.uk/Articles/2017/11/28/337311/main-residence-relief-and-gardens This ruling determined that ownership was on exchange of contracts whereas it couldn’t become a PPR until it could be occupied on completion. Now clearly many houses exchange before completion but we are talking nearly 3 years here and the house was only occupied by the buyer for 2 years so no doubt he came to the attention of HMRC. Given the date of sale (2 years to the day since he moved in you do have to wonder if he thought 2 years would ‘save’ him). It does need some thought however if self builders are going to purchase a plot for a self build. Given this ruling it may be prudent to move to the plot (or finished house) within 2 years of purchase to avoid this scenario. There hasn’t been a test case with a self builder however, but I doubt if there could be a distinction between self build and developer build.

Yeah it’s a PITA and I’ve moaned about it on here before lol. Not too bad if there are half a dozen posts but your posts don’t tend to be your

Yep all good now 🙂

Change it to a link rather than embed because embed takes you to the first post but a link takes you to the post you want to reference. Yeah it’s crap but them’s the breaks.

@Declan52 mine used to empty a 475l tank constantly before @Nickfromwales and @PeterW came up and sorted it out. It clearly wasn't set up properly (I'm not entirely sure what was wrong with it but it works now). The manifolds called for heat when all of the zones were switched off and the hot water just seemed to disappear. It's probably not the same issue for @Christine Walker but clearly something needs to be sorted. Yes Christine get the bugger back out to sort it! They charge enough for these MCS installs!!

@Johnny Jekyll there has been a recent judgment by the Upper Tribunal of the Tax and Chancery Chamber that calls into question when a property can count as a PPR. This may be relevant for those people who hold plots of land that they later wish to build on and become their PPR. Have a read here. Might be worth your parents delaying the transfer until you are ready to start your build as if you complete within 2 years you may not be liable for CGT but best to take advice.

Yes, a large part of the gain was made when it was not his PPR. So the period when he was legally entitled to sell the property (in 2007) even though the conversion works hadn't started then, up until the point he was physically able to occupy the property when it was finished in 2010.

I think you will need to consult a professional TBH. I'm clearly no expert so this is just my personal view from reading the various regulations. Had you sold both plots before or at the same time as you sold the main house I think you should have been exempt from any CGT as it was your PPR (slight question mark over this however as I imagine the entire plot was over 0.5 hectares that seems to be the exemption limit that HMRC deems to be appropriate in most cases unless you can demonstrate that additional land was needed to enjoy the house). In order to ascertain whether you actually made a loss on the sale you would have needed to have the 2 plots valued at the same time as the house was sold. This is what would have needed to happen had the property in question been a second home or an investment and thus there was a liability for CGT. However, as this was your PPR the fact that you may have made a loss on the sale is irrelevant because the PPR rules exempt a property disposal from being judged to be a capital gain. Therefore when a loss arises on a PPR disposal in the same way that you are not liable for CGT it cannot be used as an allowable loss either. So what happens when you come to sell now? Well both your plots will be liable for CGT and CGT will be due on the increase of the land from the point that the property was no longer your PPR (one assumes that this was the date of sale). So you will need to calculate the increase in price and pay CGT on that if over the tax free allowance of £11,700 (in 2018/19). You can also offset the costs of selling the land (legal costs etc) and the cost of obtaining planning permission. Anything left over is taxed at 18% for a standard rate tax payer and 28% for a higher rate tax payer. So unless the price of the plots increases a lot from the point that you sold your house you may not have to pay any CGT but it may be worth disposing of the plots in separate tax years to take advantage of the tax free allowance, but be mindful that this allowance is used for other assets being sold such as shares, not just property being sold. If the plots are jointly owned you may be able to offset both your tax free allowances. Not a straightforward scenario so don't take my word for it, you will need to take advice and presumably complete a tax return whether you need to physically pay any CGT after allowances are deducted or not.

Lol, well ordinarily MTFU would apply but given that one of my knees is fecked and I don’t do heights I’ll cut some slack! 😀

For reference the full details of the case referred to above are here. The purchaser paid a reservation deposit in 2004 for the right to secure a lease on an apartment in London. Towards the end of 2006 he entered into a contract for the lease. The appartment did not exist at the point - it was a space in a tower that was part of St Pancras Station Hotel that was disused. The purchase price was 575k. The progress of the work was impacted by the credit crunch and work on the appartment did not start until Nov 2009. The buyer was not allowed access to the building at all until December 2009 when the work commenced. Legal completion was on 5th Jan 2010 when the buyer moved in. He then sold the apartment on 5 Jan 2012 exactly 2 years later. The buyer sold his former property in 2007 and between then and the date that he occupied the new appartment he stayed in temporary accommodation none of which was determined to be a principal private residence so he maintained that the new apartment was his PPR and thus capital gains tax was not applicable. Initially the First Tier Tribunal decided that the period of ownership could only begin when the buyer was legally entitled to occupy the building which is when it became his PPR and thus CGT was not payable. http://financeandtax.decisions.tribunals.gov.uk//judgmentfiles/j9695/TC05724.pdf But then HMRC appealed to the Upper Tribunal and that decision was overturned. The findings of the Upper Tribunal were that the buyer had a legal right to dispose of the property by way of a sub sale from March 2007 when the second deposit was paid and had he done so a capital gain would have been made without any question of PPR. The Upper Tribunal concluded that the period of ownership commenced from the date of exchange in March 2007 and at that time the property could not qualify as the buyer’s main residence for PRR purposes as it wasn't able to be occupied. Thus CGT of 61k was payable (his total gain was 640k). https://www.bailii.org/uk/cases/UKUT/TCC/2018/280.pdf I imagine that this could have implications for self builders who buy a plot of land well in advance of any work taking place. There is a 12 month grace period that allows a house to be built that can be extended to 2 years in 'exceptional' cases but that still isn't long in the great scheme of things. So if you buy a plot to build your dream home later this could be something to take advice on. And if you maintain your current home whilst that new house is being built you had better ensure that it is complete in 2 years (you may have to apply for the additional 12 months 'exception' period from HMRC as ordinarily it's 12 months) otherwise you may find yourself liable for CGT when you come to sell. It's not clear from this whether you can get round this by living on the site for an extended period as it is not clear whether it is the plot itself that is judged to be the PPR or the specific house that is being built on the plot.

@Declan52 that's exactly how I run my UFH from the electric boiler. It would cost an arm and a leg if I had the UFH calling for heat all the time so the UFH is set so that the boiler just comes on once a day (in my case at 5pm).

Ah, no weirder than most up the valley then

Wondering how much weirder ....