I have just purchased a site with outline planning permission for up to two dwellings. One will be a self build, and the second will be a development to sell on.
Now, I know one option is to build one live in it a year, and then do the second one, however, we have two young children and I would like t minimise the disruption and get both properties built at the same time. However, I obviously want to minimise the tax due. I have a few thoughts but need some advice from someone with more tax knowledge than myself.
Thought 1) Convert as much of the gain to CGT as I can. The plot currently has outline planning permission for up to two dwellings. Once detailed planning permission is secured, the value of the plot will rise significantly. Is it possible to recognise some of the gain at this point (ie. utilising the £10k CGT relief both my wife and I have), and therefore starting with a higher "land" cost in the calculation of the property on the development property.
Ie. Plot bought for £220k - ie £110k per house plot. Once detailed planning permission is obtained, this will increase to £230k. We take CG relief of £10k each, and therefore no CGT is due. As no real transaction has take place it would only be some sort of paper exercise.