This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.


A bit of data which remembers the affiliate who forwarded a user to our site and recognises orders from those who become customers through that affiliate.


Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Enrol now on the free landlord tax strategies course

To enrol in the 7 tax saving strategies email course complete the form below. The first module will be emailed to you immediately.

Enrol now on the free landlord tax strategies course

Thank You!

Free Tax Saving Strategies Course
The seven FREE property tax busting strategies course reveals the secrets of how to legitimately beat the taxman and boost your property profits!
View All Questions

When Do I Pay Capital Gains Tax (CGT)?


If I get planning consent and build a house in my garden (we occupy the main house), do I pay CGT when I sell it? If so, can I live in it for a short time to offset the tax? 

Arthur Weller Replies:

Yes, you will be liable to tax if you sell a new house that you build in the garden of your existing home, if you do not occupy it as your principal private residence (PPR). If you sell it soon after completing the building, most likely HMRC will classify you as a property developer and charge you to income tax (and Class 2 & 4 National Insurance contributions) on the profits. 

If you rent out the new house for some time, HMRC will most probably accept that the profit you make on the eventual sale should be assessable to CGT, and not Income Tax (and NIC). If, however, you move into the new house for an extended period of time and make it your legitimate qualifying PPR then the profit on sale will escape tax due to PPR relief.

Property Tax Insider This sample question and answer is taken from Property Tax Insider, a monthly UK tax saving magazine for landlords and property investors.

The first issue is free so click here to try today!

Got a burning tax question?

Why not submit a tax question to our tax advisors

Ask a Question