Do we make a PPR election here?

Do we make a PPR election here?

Didn't find your answer?

Property A--owned many years, lived in as a main residence.

Property B--Acquired Jan 05 and was renovated for 12 months

March 2006-moved out of Property A into B. A is now up for sale

Q.If say in 10 years time they sold property B then would the whole of the period of ownership be exempt and covered by main residence(assuming A was sold say in 2006)

Just concerned that they did not live in property B between Jan 05 and March 2006 and hence this would not be exempt?

Many Thanks for any help

david

Replies (4)

Please login or register to join the discussion.

avatar
By AnonymousUser
21st Apr 2006 14:21


Elect for B to be main residence from acquisition. You are within the two year window.

There will be no tax on sale of A because the last 36 months' ownership of a house that has been the PPR are treated as exempt.

The renovation period should not be a problem.

Thanks (0)
avatar
By User deleted
21st Apr 2006 17:36

What if no election made?
Thanks Phil for that.

If no election was made could there be a tax problem with property B ie The renovation period?

Thanks (0)
avatar
By Blythe
24th Apr 2006 15:47

The opposite view
The PPR election is used to identify which of two (or more) properties in which you reside (hence 'residence') should be treated as exempt from CGT.
If you haven't resided in property B until now (as it appears that you haven't) then how can you say that it was your PPR from Jan 2005. I'd say there is no grounds for a valid election.

Thanks (0)
avatar
By barryhallam
24th Apr 2006 16:57

Consider ESC D49

For main residence relief to apply for a particular period, the property must be a ‘residence’; therefore if there is a delay between acquisition and the property becoming a residence then the period of delay does not qualify for relief.

However, by Extra-statutory Concession D49, HMRC will treat the period of delay as being a period of residence provided that:

* the delay is because a dwelling is being built; or

* the delay is because of the continuing occupation of a previous residence pending sale; or

* the delay is because alterations or redecorations are being carried out.

In these circumstances HMRC will then allow extended main residence relief if:

* the delay does not exceed a year, or
* a maximum of two years if there are good reasons for the delay; and

* at the end of the period the property becomes the main residence.

Thanks (0)