NRCGT and selfbuild

[Guy overseas]

Hi
Looking for some help
We bought a house in 2008 and in 2014 started to build a house in the garden, it took a few years to build and all this time the house was on the same title as the original house as the Land Registry said they would only split a title on a sale.
We as got close to finishing the new build we put the original house on the market and it sold in April 2017 this is when the new house first got it's own title.
Our situation changed over the summer of 2017 and we decide to move oversea (but to where my wife is from) we sold the new build in April 2018.

Now trying to complete my NRCGT and looking at the calculation - understand there is no CGT due to the 18 month rule, but unsure as to what value to put on the new build on the April date when we completed on selling the original house and so created the title for the new build.

Do I say it was zero and not sure as to say it was bought,or gifted - any help warmly received.

[bd6759]

The cost of the house will be the value of the land in 2014 when you started building it, and the cost of the build. The date the original title was separated is irrelveant.

You may have difficulty persuading HMRC that the sale is exempt.

[maths]

Not sure that the CGT position is particularly straight forward.

The base cost for CGT will be the cost of the land on which the new property was built plus cost of the build.

The base cost of the land will be a pro-rata amount of the original purchase cost. It seems appropriate to value the land as at the date building work commenced, April 2014.

You don't say whether you lived in the new build prior to sale but presumably you did from April 2017'ish to date of sale April 2018.

However, if you sold whilst non-resident then any capital gain is subject to the non-resident CGT charge; this is based on market value of the property as at April 2015 (not the April 2014 date).

The total ownership period is thus April 2014 to April 2018 of which April 2015 through to April 2018 is relevant for the non-resident CGT charge. From April 2015 to April 2017 the building was not occupied as a residence. Assuming that the property qualifies as a sole/main residence (which isn't definite) then the last 18 months would be exempt from the non-resident CGT charge; the balancing 6 months would appear to be subject to non-resident CGT charge.

The period April 2014 to April 2015 falls outside the non-resident CGT charge but falls subject CGT.

[Guy overseas]

Thanks both

I think the Non-Resident thing is throwing people a bit, I see this as a simple self build issue. If I hadn't left the UK I wouldn't be notifying HMRC to the sale of my PPR, so this is only being asked to do so because we began residents of another country.

So maybe the question should be what date and valuation does a self-building use when working out CGT on a house in their garden that they built, lived in as their PPR and the sold.

The calculate ages "What date did you sign the contract to become the owner?" To me there are only two dates here that could be used. The date when I became the owner of the larger title that had a House with a large garden, or the date when I sold the original house and the new title was created.
Then for the valuation I suppose the value of the plot plus build costs seems reasonable.

maths you are suggesting using a data of 2014 to value the land - but the how much did you pay for the property question comes after the question about the date I signed something to take ownership of it, as there was nothing signed in 2014 I'm struggling to see how a valuation in 2014 would make any sense.

Does anyone else have an opinion? I suppose this is like the old adage, of only needing to lawyers to get 3 differing opinions.

[maths]

I think the Non-Resident thing is throwing people a bit,

Not as far as I'm aware.

You sold a residential interest in the UK whilst non-resident; hence in principle you fall within the non-resident CGT charge.

The legal title issue is irrelevant. CGT is based on beneficial ownership.

[Guy overseas]

But aren’t the rules for non residents the same as for residents in regards to the actual CGT you have to pay apart from fact that they only pay tax on any gains made after 6 April 2015

[maths]

In broad terms, yes.

However, with respect to a sale by non-residemts a tax year only qualifies for private residence relief (where property in a territory different from residence of owner) if the 91 day test is satisfied in that year. There is no equivalent test for normal PPR.