I have a small plot of land with planning permission for a small, 2 bed bungalow at the bottom of my garden which I have had the sale of fall through on a number of times, so I have decided to build the bungalow myself. I know I am able to sell the land and not incur any capital gains as the original plot is much less than the half a hectare allowed. My question is, when I sell the land this time with the bungalow on it do the same rules apply; in essence, will I have to pay capital gains tax (CGT) on the sale or is there another way around this?

You will not have to pay capital gains tax (CGT) on the land because this is covered by principal private residence relief (PPR) but you will have to pay income tax and Class 4 National Insurance on the profit made on the sale of the house if sold soon after completion because this is a trading venture. If you decide to keep the house for some years and rent it out then you will probably be liable to CGT when you sell it because it is an investment asset.