Are Potential Changes by The Government to Capital Gains Related Tax Going To Hit Self-Builders Harder Than Others?

[Daveattavistock]

I have recently started to think about the capital gains tax position of my self-build property.

 

Up to now it has been my primary residence and therefore has no current CGT liability.

 

However, there has been a lot of ‘kite-flying’ (to test public reaction) from the government and Rachel Reeves over potential changes to the CGT rules.

 

Several, influential left-leaning think-tanks (that Labour listens to) have forcefully pushed the case that all house price inflation is ‘unearned’ and should be redistributed (heavily taxed)

 

A full imposition of CGT on primary residences is unlikely but there may be new tax changes coming that are linked to CGT values and calculations on certain categories of property.

 

The danger here for self-builders is that they, technically, have no conventional property purchase price to use as a starting point in any CGT calculation.

 

Many self-builds are achieved at a very low cost base which puts us at a severe disadvantage when it comes to a CGT calculation start.

 

I initially moved into my self-build in 2003 and it cost me £65,000 for the land and £95,000 in materials and labour.

 

It is now worth between £700,000 and £750,000.

 

Its initial huge jump in value was entirely down to my initiative and over 12,500 hours of hands-on work over an extended construction period (I also had a separate full-time job)…. but there is probably no mechanism in their rule books for HMRC to take that into account.

 

If you are a non-UK resident you can rebase you property value to April 2019 for a CGT calculation…. but there is no option like this for a UK resident.

 

There also does not seem to be any rule which would allow a UK resident self-builder to use a market value at the time of the property completion… it would be down to a very uncertain negotiation with HMRC.

 

I have written to my MP to ask if they would make representations to the government to avoid unfair treatment of certain property owners like us due to what are, sometimes, very blunt and all-encompassing tax instruments.

Edited 23 hours ago by Daveattavistock

[ProDave]

We can only guess until what they are actually going to do is known.  It is no surprise they have to raise more tax from somewhere and "those rich home owners" are seen as an easy target.  Except an awful lot of people are now "those rich home owners"

 

As with most things this government do* , it would result in unintended consequences, like people not moving house and a whole section of commerce (estate agents, mortgage companies, removal companies, builders etc) grinding to a halt.

 

* whoever would have guessed placing more tax burdens on employers would result in them employing fewer people for instance.

[Daveattavistock]

I agree with you but once it becomes law it is already too late.

 

The time to make representations is before amendments to a bill are tabled.

[Temp]

It will be a nightmare.

 

Some self builders will have made a loss.

 

Many will have difficulty proving the build cost.  Why keep builders invoices if there was no VAT to reclaim?

 

 

[Alan Ambrose]

The government is desperate(it shouldn't be but it is) and I think that means they will cast avaricious eyes over any wealth with a view to taking a slice of it. Politically, their best choice is probably targeting smaller groups without much say or influence and who can't or won't take much avoiding action. The boomers house price inflation is an obvious target.

 

It would be good to make the tax system have a bit more common sense and fairness - sudden tax cliffs and now-we've-got-you paperwork snafus (e.g. CIL) are grossly unfair and penalise the not-so-smart or simply unfortunate. =

 

Stamp duty is just silly, we've looked at moving a couple of times, but the stamp duty payment would be eye-watering, so like a lot of people we just stay put. An annual property tax instead would be fairer and encourage people to downsize if they don't need the space. 

 

>>> The danger here for self-builders is that they, technically, have no conventional property purchase price

 

Well they do, and I'm sure we, for instance, won't make much gain, but it does involve keeping good records.

 

[Russell griffiths]

Stop giving money to fat people to sit at home all day. 
there money problem solved. 
 

the amount of fat lazy dole bludgers over in Tenerife a few months back was staggering. 
 

my place doubled in value as soon as we got planning in place, it has since doubled again with a house on it. 
 

at least by the time I come to sell labour will be a horrendous memory. 

[Nickfromwales]

16 minutes ago, Russell griffiths said:

at least by the time I come to sell labour will be a horrendous memory

They're all lying, 2 faced, self-serving assholes though. Not just any one of them.

[BotusBuild]

Talking to a conveyancer recently about this and they said most likely that stamp duty will disappear and an annual property tax will be introduced instead. This will be in place of the CGT rumour/kit flying.

 

It beggars belief that in a little over a year, the UK finances are apparently in such  a poor state. There's a lot of reasons, people, past governments that have a hand in this situation. We really should have followed the Norwegian model of handling North Sea oil revenue to create a sovereign fund.

 

 

Edited 15 hours ago by BotusBuild

[nod]

Anyone with any assets are not safe while this government is in power 

The working man has become Benefits man under this left wing government 

We where about to set trust funds up for our children Now we are being advised that they may not be safe 

 

Im planning to close my business down and spend as much money as I can 

 

Weve sold all our 22 rentals due the law changes 

Theres no incentive to better yourself in this country 

 

I would advise anyone planning to self build or any other ventures To do it as quickly as possible before the rules change 

This government are intent on squeezing every penny out of you and I (The Rich )

 

 

[Nickfromwales]

1 hour ago, nod said:

Anyone with any assets are not safe while this government is in power 

The working man has become Benefits man under this left wing government 

We where about to set trust funds up for our children Now we are being advised that they may not be safe 

 

Im planning to close my business down and spend as much money as I can 

 

Weve sold all our 22 rentals due the law changes 

Theres no incentive to better yourself in this country 

 

I would advise anyone planning to self build or any other ventures To do it as quickly as possible before the rules change 

This government are intent on squeezing every penny out of you and I (The Rich )

 

 

Yup.

 

Gluttony and corruption come with the territory, and then you add to that the joy of them being ‘influenced’ by the elite.

 

They only have to blag their way through 4 years, and then off the toddle with another chunk of our money…..”set for life”.

 

Makes my blood boil.

 

Any trust for my kids will be cold hard cash, in a box, where nobody can see it, smell it, steal it, or take most of it to perpetuate their failures.

 

Just a sinking ship, and the water is now pouring in faster than it can be bailed out.

[Crofter]

6 hours ago, Russell griffiths said:

Stop giving money to fat people to sit at home all day. 
there money problem solved. 

Have you ever claimed JSA yourself?

[Crofter]

2 hours ago, nod said:

Weve sold all our 22 rentals due the law changes ...

 

This government are intent on squeezing every penny out of you and I (The Rich )

Well if somebody who owns more than 22 properties isn't rich, who is???

[Roger440]

Its going to get a lot worse yet.

 

Property and pensions are the 2 biggest stores of wealth.

 

Expect them to be raided increasingly over the next few years, until we go bust and go to the IMF for a bailout.

 

Aside from leaving the country, theres not much most of us can do. 

 

 

[Roger440]

1 minute ago, Crofter said:

Well if somebody who owns more than 22 properties isn't rich, who is???

 

If you "own" them, then yes, id agree you probably are.

 

However, i suspect they were not "owned", but ill not speak for the person in question.

 

But id be less hasty to judge.

[nod]

19 minutes ago, Crofter said:

Well if somebody who owns more than 22 properties isn't rich, who is???

I don’t own any rentals