Tax implications of residential property sales

KEY POINTS

• Opting to tax a property may have unexpected consequences when selling.
• Stamp duty land tax charges may be affected by VAT considerations.
• Capital gains tax and income tax may both be due on sale.
• Land pooling arrangements should be carefully checked before signing.
• Impact of annual tax on enveloped dwellings.

There are myriad considerations when a client sells land buildings or both to a developer. These cover capital gains tax VAT stamp duty land tax (SDLT) land pooling and annual tax on enveloped dwellings (ATED) for both parties.

At a basic level Build Ltd may approach a client with a view to purchasing property without planning permission. The price offered will reflect the cost of applying for consent and the risk that...