Self build VAT family recliam

[wils77]

Hi

 

We are building four houses as a family and we intend to live in three and maybe sell the fourth. We are currently around 50% way through the build but have only now started to look at the VAT reclaim process for self builders.

 

Each of the three family memebers have invoices in there there own name and have tried to spilt the costs 3 ways.

 

How best should we proceed ? 

[Temp]

Welcome to the forum.

 

The self build reclaim scheme is intended only for people building a house to live in so selling the 4th house could be problematic for the vat reclaim. Try and find a relative to build it for? There is no minimum period they must live there (apart from the CIL exemption requirement of three years but I'm guessing there is no CIL in your area), however HMRC may look for evidence of their "intention" if they decide to check.. If you can't do that you may have to subtract 25% from your reclaim for the 4th house.

 

There is also an issue that prevents developers reclaiming VAT if the first use is a long let.  Pretty sure self builders are precluded from using the self build reclaim scheme for a build to let.

 

I believe its possible to use the scheme to reclaim VAT on a house built for a relative but I don't think I've seen it written down anywhere. You would need to explain why the invoices are in four different names.

 

As you are new to the forum I should check you know that the reclaim only applies to vat paid on materials. Services/labor must be zero rated to you, meaning there is no vat to reclaim on services.

 

[newhome]

When I did my reclaim for my house the plot had PP for 2 houses. HMRC queried what I intended to do about the second house. As it happened the plot had been divided and split into 2 plots before I bought my plot so it was all fine but if they know that there is planning permission for 4 houses they may ask you about your intentions for the 4th. 
 

 

11 hours ago, Temp said:

I believe its possible to use the scheme to reclaim VAT on a house built for a relative but I don't think I've seen it written down anywhere. You would need to explain why the invoices are in four different names.

I took that to mean that they would be sending in 3 claims but that the 4th house was shared between the 3 sets of paperwork and ‘hidden’ for want of a word. It depends what HMRC asks when the claims are sent I guess. You are better getting a relative to live in 4th house for a while in truth. 
 

[nod]

2 hours ago, newhome said:

When I did my reclaim for my house the plot had PP for 2 houses. HMRC queried what I intended to do about the second house. As it happened the plot had been divided and split into 2 plots before I bought my plot so it was all fine but if they know that there is planning permission for 4 houses they may ask you about your intentions for the 4th. 
 

 

I took that to mean that they would be sending in 3 claims but that the 4th house was shared between the 3 sets of paperwork and ‘hidden’ for want of a word. It depends what HMRC asks when the claims are sent I guess. You are better getting a relative to live in 4th house for a while in truth. 
 

Good advice                                            

we are about to embark on our second and are hoping not to have to pay CG tax on the Large amount of profit made on our  first self build