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Where Taxpayers and Advisers Meet

Valuation for CGT of New Build (Following Demolition)

hobekinus
Posts:3
Joined:Wed Aug 06, 2008 3:12 pm
Valuation for CGT of New Build (Following Demolition)

Postby hobekinus » Sat Aug 28, 2021 6:08 pm

My wife and I bought a plot with an ageing bungalow a few years ago. We demolished the bungalow and have built a new house which is nearing completion. We will not be declaring the new house as our principal residence, at least until we sell our existing house at some point in the next few years.

How will HMRC place an initial value on our new property when the time comes to sell (probably not for a few years at least) and we have CGT to pay? Will the value equal the purchase price of the original house plus the cost of demolition plus new build costs? Or will HMRC have some other way of arriving at an initial value?

The reason for asking is that we have probably spent more than the current market value of the new house on the combined purchase, demolition and new build costs, and it would be good to be able to keep track over time of what an eventual CGT charge might be. Also, it might help us to gauge when we should sell our existing house and nominate the new build as our principal residence.

Any advice gratefully received. Thanks.

pawncob
Posts:4749
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Valuation for CGT of New Build (Following Demolition)

Postby pawncob » Sun Aug 29, 2021 8:18 pm

It's a matter of fact, not valuation.
Might also be a venture in the course of trade.
With a pinch of salt take what I say, but don't exceed your RDA


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