CGT and Stamp Duty on Self Build

[mick1]

My wife and I are in the process of building a house on a site we are buying from my parents. We are currently living and working in UK and we might sell the house next year. Would we have to pay CGT if we were to sell or if we were to move back, how long do we have to live in the house as PPR before we sell to avoid CGT. What are the formalities to go through to prove PPR.
Also, do we have to pay Stamp Duty on site as the site costs E100,000? Will my parents have to pay CGT on sale of site to us?

 

[ClubMan]

Would we have to pay CGT if we were to sell

If you never live there then yes.

or if we were to move back, how long do we have to live in the house as PPR before we sell to avoid CGT.

No fixed period. Once Revenue are satisfied that you are genuinely owner occupiers there is no definite fixed period before you can sell and obtain PPR relief as far as I know.

What are the formalities to go through to prove PPR.

None. It's effectively a self declaration process. Although I guess that Revenue could always ask for proof but I've never heard of it.

Also, do we have to pay Stamp Duty on site as the site costs E100,000?

I think so and the rates for development land are not the same as for properties as far as I know. Note that consanguinity relief may apply here since the transfer is from your parents to you (and your wife). This would set the SD chargeable at half the normal rate.

Will my parents have to pay CGT on sale of site to us?

I think so but am not 100% sure.

You and your parents should get independent professional advice since there could be more tax efficient ways to execute this transaction than a straight sale.

 

[mick1]

Thanks a lot for your advice.