Do I pay CGT if I build two apartments within my PPR residence?
I am planning to extend my property (Principle private residence) to build two apartments. While I would continue to live in my current property I want to sell the two new apartments. Do I have to pay any tax from the gains? If yes then how can it be reduced?
If the new apartments are essentially separate from the original dwelling, with their own entrances, then for tax purposes they will be considered separately.
Therefore they will not benefit from principal private residence relief, except on the land on which they are built. This assumes that the land was used until now for the enjoyment of the taxpayers dwelling.
So tax will have to be paid on the profit on the apartments.
From your message it seems as though you are doing this as a property development project, not with the intention of keeping long term. If so the profit will be subject to income tax, like any trading income.
If you are a basic rate taxpayer, and can take dividends from a limited company without further tax, it may be worth exploring the possibility of doing the project through a limited company.
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