CGT - let property

CGT - let property

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Client rented a house for the family.
At approx. same time bought a smaller house in same area and rented it to parents.

The owned house is now to be disposed of at a substantial profit. The client has to date never lived in that property.

If the client moves into it now as their residence for a short while does the last 36 months count as ppr? I'm sure it doesn't but wouldn't like to miss if it does.
Any other reliefs apart from non bus asset taper and annual allowance?
knuckles

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Euan's picture
By Euan MacLennan
22nd Sep 2006 09:46

The answer to your question is Yes
The last 36 months of ownership is deemed to be occupation as a residence provided that the property has at any time in the period of ownership actually been a residence.

But I entirely agree with Ken's comments on whether the owned house can be considered as ever having been the client's residence.

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By AnonymousUser
21st Sep 2006 16:36

Depends what you mean by ...
... a short period and whether they have anywhere else to live at the same time. If they intend to move out of the let property and occupy the owned property for, say, 6 months, they shouldn't have too much of a problem. However, if they intend to continue residing at the let property, it's not really conceivable that they could also reside at another property in the same area. Less than 6 months may be OK if there is no other residence. It is often said that residence is qualitative rather than quantitive and if there is no other residence that seems a pretty strong indication that the owned property is their residence. A month was not long enough in Goodwin v Curtis, where the Commissioners found that the taxpayer had not intended to occupy the property as his permanent residence. The legislation does not use the word permanent but if the house is put up for sale immediately after the clients move in that would not be helpful, but if they intend to stay at the let property afterwards anyway it seems a non-starter.

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