This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.


Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

CGT on a plot with planning permission

Posts: 6
Joined: Tue Feb 25, 2014 12:27 pm

CGT on a plot with planning permission

Postby anty » Wed May 22, 2019 4:47 pm

I am hoping someone could help me with the following query:

I bought a property with a single house on it 6 years ago. I then passed planning permission to demolish this house and replace it with 2 detached houses.
3 years ago I built one of the planned houses and currently live in it. The entire plot size is 0.25 acres and the second new build plot to the side of the current new build was grassed over and used as a garden.
I now plan to build the second home on this plot. My current two options are:
1) To build the new build in my name and sell it on, with the profit (sale price – (build cost + land cost)) subject to income tax.
2) Open an SPV and transfer the land from myself into the SPV (stamp duty will be paid I believe) and deal with profit through corporation tax / entrepreneurs relief etc.

My questions are:
• How would I work out the cost of the land? The current market value of the plot as valued by a RICS surveyor?
• Would there be any CGT on this land value in 1 and/or 2 above? I understand under normal circumstance I would get PRR relief if I just built in the garden as my entire plot is small and the second new build plot has been used as a garden. But I am concerned that the fact I got initial planning permission for 2 new builds at the same time and have only lived in the one for 3 years it may be deemed otherwise.

Is there anything else to look out for that I have missed?


Posts: 251
Joined: Tue Sep 26, 2017 6:28 pm

Re: CGT on a plot with planning permission

Postby AdamS93 » Wed May 22, 2019 5:46 pm

I wouldn't be confident that the SPV would qualify for entrepreneurs relief based on the facts provided.

For meaningful advice, you want to sit down with a professional with the figures, a forum will only point you in the right direction. Professional advice can literally save you thousands in this type of scenario.

Most people in your situation would sell the house the live in and then move into the new build.

Posts: 6
Joined: Tue Feb 25, 2014 12:27 pm

Re: CGT on a plot with planning permission

Postby anty » Thu May 23, 2019 11:37 am

Thanks for the reply.

I do have an accountant / tax advisor that handles my limited company, but they aren't helping too much on these points so I am looking at moving on!

I will investigate the entrepreneurs relief in due course, but my main query for now is whether I would be charged CGT in either of my options.

Return to “Property Taxation”