house to flats tax implication

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    house to flats tax implication

    i have a large house which i have rented for 18 years and i am considering turning into 3 flats. would i be able to sell as a develope (treated as a trader) when the flats are completed?
    would it be a capital gain or would i be able to move them into a company just paying stamp duty

    "Moving" it into a company would crystallise the capital gains, based on the market price of the property, at the time, as it is a transaction with a connected party.


      If you sell the house to a company, you would be liable for capital gains tax on the calculated capital gain ( = sale proceeds minus original cost ) at 18% or 28%. But you can claim personal capital gains allowance of about £12K. The company has to pay sdlt.

      If you convert the house and separately sell each flat , then you would pay tax after each flat sale on the capital gain
      ( = sale proceeds minus 1/3 house acquisition cost minus 1/3 cost for conversion )


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