Hi, I live in Scotland and I am in the process of purchasing a property which was originally a flat above a row of shops but has been used for the past 20+ years as a commercial office. It is currently vacant and my intention is to convert it back to a private residence. To do this will require extensive renovation work.
To make the purchase I will either, (a) sell my main (only) home and fund it through the proceeds of the sale, or (b) keep my home and fund it through savings I have accrued . My taxation related queries are:
1. I am aware that if I follow route (b) will I have to pay LBTT (Stamp Duty) bearing in mind that the property is currently a commercial office not a private residence?
2. Presumably I will have to pay vat on the work I get done and on the materials etc. that I purchase. I understand that I can reclaim this if follow route (a). Can I still make a reclaim if I follow route (b)? At what rate will I have to pay vat, 20% or 5% or what?
3. If I follow route (b) and then sell the renovated flat post completion am I liable for CGT on any profit I make? If so, what rate would I pay? I am aged 61 and retired but have no pension (or other) income until I reach 65.
4. If I rent out the renovated flat is it correct that I am liable for income tax on any rental income above the personal allowance threshold?
Many thanks
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