Off plan investment

Hi,
I am sub-contracting on a new development soon where homes are being sold off plan for 2.5m. They are expected to be valued at 3m when completed. If so I am thinking of remortgaging my home for the 250k deposit needed until the house is completed.
My questions are, if borrow the 250k over say 12 months on top of my 240k current mortgage should I go interest only on the 490k?
Am I entitled to tax free allowance as I will be paying a years 250k mortgage on a property that is not yet built. How do the lenders see this when borrowing?
If the property is valued at 3m on completion what are the tax procedures? Am I right in saying I pay 20% CGT on on the 500k profit?
I was then hoping to use the 400k to upgrade home in the future.
Also and I appreciate your patience in reading this... I will be basically selling on the contract.. is the buyer liable for stamp duty? The house will be 3000 sq ft. (278sq mtr)

Many thanks
Jack

JackB

Interest only or capital repayments on 490k for 12 months is a personal choice. The capital element on a capital and interest repayment mortgage of 490k over 12 months will be minimal.

It will be difficult getting interest relief on the 240k unless you can demonstrate to the Revenue that the mortgage is for home improvements on your principal private residence.

You will be liable for 20 percent CGT on the gain.

Avoid stamp duty if you instruct your solicitor to buy the property in trust provided you assign the contract to another party before the property is completed. The party who completes the purchase of the property will be liable to stamp duty.

Archie said:

JackB

....The party who completes the purchase of the property will be liable to stamp duty.

Click to expand...

I take it this is because the property is over 125sq.mts. and not because it's being sold on.