Tax Implication on a new build

[anty]

I am planning some building work and would like advice if possible!

I have bought a property which I have been living in for two years. I plan to demolish the existing dated bungalow and build two detached houses, one of which I plan to live in.

Now I understand in the act of demolishing I lose the PPR on the existing home. I also understand that I will pay income tax / capital gains tax on the home that I will not be living (which tax will be dependent on if I sell immediately or keep it for some time as an investment)
What I am not sure on is the home I am building for myself. Would me moving into it make it my PPR and then when I eventually sell I don’t pay any tax?
It has been suggested to me that it can be viewed that I carried out the works to realise a gain and thus will be taxed on it by (S224(3)). The same person suggested that if I transferred the property into my wife’s name after I built it will be a way around this rule?

Any advice will be appreciated!

[Tom7000]

I believe it depends on your intent when you build it. If your intent is that one of the properties become your permanent home it is tax free.
If your intent is just to live there for a bit to sell and make a profit it is not your PERMANENT home and you pay tax on it.

You may of course at the outset decide it is your permanent home then some time later decide you want to move, you are allowed to change your mind

It all depends on what you intend.

[King_Maker]

Any profit on the "other" property could be subject to Income Tax (up to 45%) and National Insurance, if the project is classified as property development.

It might be prudent to consider using a limited company.

[Tom7000]

Ah yes, what king maker said...and possibly jointly owned with your spouse. That should also save a bit of tax, depending on her income.