Hi,
We were granted planning permission to build 2 houses in the rear garden of our house. We have subsequently sold the house and retained the 2 plots.
Through a main contractor we are planning to build 1 house and live in it as our family home (via the self build route).
We are planning for the main contractor to build the other house probably with a view to selling it but we aren't sure of the most tax efficient way to do this and I was hoping that somebody may be able to
If we build outside of a Ltd company structure would I be right in thinking that we would pay income tax on the profit, with the profit being the difference between selling price minus land value minus building costs (including VAT). I'm a higher rate tax payer, my wife a lower rate taxpayer.
We are also vaguely aware that we could build the 2nd house through setting up a limited company, would the profit calculation be roughly the same i.e. Sale price less land value, less build costs at zero rated VAT?
but I almost can't see the point in the company approach as it seems as if the lower corporation Tax advantage over income tax would be negated by dividend tax if we wanted to take the profit out? But I've read today about entrepreneur relief and am thinking this might apply?
Final option would be to build house 2 and rent it out, possibly selling it at a later date in order to buy 2 smaller rentals that might generate a better yield, would this be best done through a company due to lower tax rate on income?
We would want any profit to generate an income rather than spend it as no desire for any big ticket items
cheers
- Home
-
Tax News
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice and Methods
- Professionals in Practice & Industry
- General
- TaxationWeb
-
Tax Articles
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings and Investments, Pensions and Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice & Methods
- Professionals in Practice & Industry
- General
- Tax Tips
-
Tax Forum
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations and Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practices & Methods
- Professionals in Practice & Industry
- General
- Tax Jobs
- Get in Touch