We purchased our home for £725,000 in 2015 and have lived here since. At the time of purchase, the house sat in 0.5 acre gardens, with a further one acre of landscaped gardens used commercially, which included a café-style shop selling garden plants. Since purchase, we have used the whole 1.5 acres as gardens, with no commercial business at all taking place; however, the use of the one acre is still registered as commercial. We are applying for planning permission to build a house on 0.5 acre of the land, with a view to building it and living in it permanently and selling the original house (which is now worth £1.5m). Any observations on the tax implications, please? 

Arthur Weller replies:  

There are no immediate direct tax implications for you when you build a new house on your land, move into it, and live in it permanently. When you eventually come to dispose of it, you may be impacted by the rules explained in HMRC’s Capital Gains Manual at CG65000 about a delay in taking up residence. As for selling your old house, you should be eligible for capital gains tax principal private residence (PPR) relief for the house. See HMRC’s guidance at CG64350P and CG64800P about determining how much PPR relief you might get for the land that is being sold together with the old house.