The tax implications of garden sale and building development.
My client has recently been granted outline planning permission for two dwellings on a plot of land at the end of her garden. She has lived in the house for 40 years and intends to live there for the rest of her life. Her surveyor has estimated that the plot of land is worth between £180 000 and £200 000. My understanding is that no tax will be payable on the sale of this land.
However my client is now considering whether it would be advantageous for her to engage a builder and fund the construction of the two dwellings herself. But I am uncertain as to the tax position if she followed that strategy. If she did would the land continue to be viewed as a tax-free asset and be factored into the final profit calculation?
Will she ultimately be liable for capital gains tax or income...
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