newhome

@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 ....

I think that's half the issue with these RHI installers. They come from miles away and then when there is an issue they don't want to return to sort things out. It's one of the big concerns for me in relation to fitting an ASHP. The folk from the Energy Savings Trust and Be Green Dunbar just say to try people in Fife or even further away as I've had no joy within an hour of here but what happens when I have an issue and no one will come out?

I believe that you can carry it forward subject to HMRC's rules: https://www.gov.uk/capital-gains-tax/losses

If you make a loss on one house where CGT should be payable you can offset that against CGT for another property that you have to pay CGT on in the future I believe. .

How is CGT assessed if you move from one house into a second property that you own? So for example you buy a second home for 300k that you use as a holiday cottage for 10 years. At that time you retire and decide to make it your permanent home so you sell your primary residence and move into the cottage that is now worth 500k. You then live in the cottage for 5 more years and the cottage is worth 600k at that point when you sell it. What is payable then? It's gone up from 300k to 600k since you bought it but 100k of that was when it was your primary residence. Are you supposed to pay CGT on the 200k when it wasn't your primary residence (excluding deductions for the tax free allowance and fees etc)? Using a similar scenario for a self build. Say you bought a plot of land for 100k and decided to carry on living in your existing house until the build was complete (or pretty much). 3 years later you move to the new house that is worth 500k then but it had cost 400k to build, so an increase of 100k. So that CGT liability of 100k carries forward to when you sell the new property? Tough gig - especially if you've done much of the work yourself thus saving £££s. Here is HMRC's internal manual that implies that there is a 12 month grace period for a house being built: https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65003 Or possibly up to 24 months: https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65009

There is no tax on smelling

Well mine was a triumph! Well done for getting it to this stage @Hecateh. I can understand the lack of excitement about the move too as in my case I moved into a single (albeit large) room simply because that was preferable to living in a caravan. Building a house is a slog not a joy most of the time. You have done really well to get to this stage, and to put it in perspective despite all of the difficulties you have managed it in a year. Many people take much longer than this so be proud. The UFH? Well that probably just needs a tweak hopefully. @lizzie's was running way too hot for ages so maybe it's something like that? If you are clocking up electricity costs with the boiler switched off are you sure there isn't an immersion on or something? You'll need to monitor things and maybe switch a few things off at the CU to work out what's going on potentially. And look on the bright side - at least it's too hot and not freezing cold! I hope you've got a decent bottle of something to toast your success. You deserve it!

Maybe he should be looking at gluing the bit of wood he sawed off to make that awkward angle back on again

Luv you too sweetie!

Can’t you get bendy tile trim or is that a sh1t idea?

You know that’s how we roll here ? ?? Did we wake you up? ?

Busy I imagine but keeps the wolves away from the sheep I guess ?

You and @Nickfromwales had a tiff?

15% off - selected sellers @ eBay.co.uk from 10th December until 14th December [£20+ Spend / Max Discount £75] There are a few building related sellers in the list ... Enter coupon code POST15 at checkout when prompted. The maximum discount you can receive is £75 per redemption and you are limited to one redemption. https://www.hotukdeals.com/deals/15-off-selected-sellers-ebaycouk-from-10th-december-until-14th-december-20-spend-max-discount-75-3130574

Ah well that's not as expensive as many have been quoted (ie some have had quotes 5 times that). As to whether that's the right ballpark for that distance someone else may be better placed to comment on.

For a different day / post but several people on here have challenged such things and have been successful. Do you have a quote for the electricity connection yet?

Welcome. Opposite side of the country to me . Are you on the mainland?

Have you had any joy with getting the pellet guzzler to go on a diet @Christine Walker?