VAT / CGT & Income Tax / Renovating Houses

[JackSykes]

Has anyone seen that programme on Channel 4 called 'Property Ladder' where they purchase & renovate a house with the intention of selling it at a profit?

At the end of the programme they usually say that any profit would be liable to tax. I was wondering what sort of tax would any profit made in this way be liable for?

Income tax or Capital Gains Tax?

If someone purchased a house with the intention of renovating & selling at a profit, would the person be required to become VAT registered?

[peter@lavat.co.uk]

Jack

I can help with regards to VAT.

The sale of a house (other than a new-build) is exempt from VAT so this will not eat into your profit. You will need to bear in mind however, that you will not be able to recover any of the VAT that you incur in the course of the renovation (on materials etc) or on professional fees so you will have to build this into your costs.

Kind regards

Peter
www.lavat.co.uk

[spike419]

It will defintitly be Income Tax where there is an initial intention to make a profit. Norman wisdom and some chap with toilet rolls found out this !

[xx213]

I am considering using savings to buy a house, renovate it and then ssell at a profit. As I will be living there whilst I do this will I liable to CGT of IT as it will be my only and primary residence?