House built on land - principal private residence relief

House built on land - principal private...

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Client has built house on land he owns whilst living in existing property. Client elected to make the new property main residence in Dec-03. The house will shortly be constructed in May-05. Client has now changed his mind with regards to living in the house as changed his mind re the catchment area for schools for his children. Client wants to sell the new house and stay in the existing house. i understand from Tolley's property taxes 13.12 that Revenue will regard land as main residence up to date house is first occupied which will be 18 months. This concession goes up to 24 months if good reason for the delay which there was due to getting the necessary detailed planning permission. It says in Tolley's property tax that where ESC D49 applies principal private residence relief is given on the both house and no election is required. In Tax Bulletin issue 12 August 1994:Where SP D4 does apply, and as a result two houses are treated as residences for the same period, no Section 222(5) election is required. Relief can be given on both houses for the period covered by SP D4.

However on the revenue site it says the the above tax bulletin section has been superseded by CG 64200 but when i search the site i cannot find any further references to CG 64200

Can anyone point me in the direction of CG 64200 and also advise if the client will have to pay CGT on the sale of the new house and whether he should occupy it for a temporary basis before sale

Thanks

John

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By ACDWebb
30th Mar 2005 13:18

CG64200 is at
CG64200

What you seem to be saying is that he elected on land without a property on it - and possibly without even planning permission at the time - and it does seem rather difficult to elect for a residence that does not even exist, and will not for a cople of months yet at least.

Moving on look at CG64421 et seq as well as CG65053 - this still refers to ESC D49. However also look at the cg updates of 260304

ESC D49 is of course only a concession, not law and does say:
This concession applies—
– where an individual acquires land on which he has a house built, which he then uses as his only or main residence - my emphasis - and would seem to require actual use as the only or main residence to bite

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