Welcome to Stuart Hoare Chartered Accountants...

Friendly, approachable and professional...

Upfront and transparent affordable fees...

Dedicated to helping you succeed...

Offering a free initial consultation...

Contact Us for your free initial consultation, to see how we can help with your accountancy needs.

Gains from Off-Plan Homes

by | Feb 19, 2020 | News, Tax | 0 comments

If you bought your home brand new and ‘off-plan’ you may realise a significant capital gain when you sell that property.

This is not a problem if you occupied the property as your main home for your entire period of ownership. In that case principal private residence relief should cover the whole of the capital gain and there will be no tax to pay on the disposal. However, an issue arises if there was a delay between the date you acquired the property and the date you moved in.

For newly built properties there can be a considerable delay between exchanging contracts to purchase (generally regarded as the acquisition date for any property) and the completion date when you move in. As HMRC have insisted that any gain is apportioned equally to every day of ownership, even when the property is not finished, the taxable gain attributed to the period when the building was incomplete can be considerable.

Fortunately, this problem has been resolved by the Court of Appeal which has ruled that the ownership period starts when the purchaser acquires full legal rights to occupy the property. This means the period from signing a contract to buy (the contract exchange date) to the date the owner is given the keys is not subject to tax.

If you have already paid capital gains tax as HMRC argued the gain on your half-built new home was taxable, you may be able to claim a refund of that tax.

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Contact Us

Please give us a call to discuss your requirements and arrange your free initial consultation, or complete our contact form and we will get back to you as soon as possible.

023 9225 4404

87 London Road, Cowplain, Waterlooville, Hampshire, PO8 8XB
Monday - Friday, 9:00am-5:30pm

2 + 13 =

Stuart Hoare Chartered Accountants

87 London Road, Cowplain,
Waterlooville, Hampshire, PO8 8XB

Email Icon

Subscribe to our Newsletter

Join our mailing list to receive the latest news and updates from Stuart Hoare and the financial sector in general.

You have Successfully Subscribed!

Pin It on Pinterest