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Best legal tax structure for self builder

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  • Best legal tax structure for self builder

    Hi all,

    I'm planning a reasonably small (land/shell price £55k, renovation/build <£85k cost hopefully £200k sale price) self-build/conversion to residential. I am aiming to complete within 2 years, doing most of the work myself. This will be my main occupation.

    What is the best legal way to reduce my tax bill? Is anyone familiar with any business off-shoring, eg. to Gibraltar? I'm going to be fairly broke over the next 2 years and then will be getting a lump sum that I don't want to be paying out more than I have to!

    What are my options (here's where I get a bit sketchy)?
    • Do nothing
      • -> pay 40% capital gains on £200k-£55k => £58k tax
    • Soletrader
      • -> pay income tax/NI on profit £200k-£140k => PAYE tax + £13,928 + NI £4,359 ????
    • Ltd salary (£60k)
      • -> PAYE tax £13,928 + NI £4,359 Employers NI £6,947
    • ltd salary (£6470) + dividends (£54k)
      • -> PAYE tax £0 NI £82 Employers NI £96, corp tax?? div tax?? (37%??) =>
    • Off shore???
      • No tax???

    Any ideas or experiences would be great.


  • #2
    Re: Best legal tax structure for self builder

    If this is going to be your occupation then initial thought is that it may certainly be worth considering setting up as a limited company. However, would definitely recommend advise from an accountant, as these situations can become complicated by other factors that may be present.