PPR

PPR

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New Client H & W - own house in London - bought second house in Cornwall four years ago inteneded as a retirement home - lived in both at various times over the last four years . The W elected for the Cornwall house to be her PPR wihtin the time limit, but the H didn't  - circumstances have changed and they are selling the Cornwall property  - there will be a gain on sale despite the dates and above the annual allowances.  

Questions - is  it possible for a married couple to have two PPR's, would the wife's gain be exempt and the husbands taxable ? - if this is the case could we transfer the property all into the wifes name before sale and her claim it as her PPR ?

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By ACDWebb
30th Sep 2010 16:08

No

Questions

- is  it possible for a married couple to have two PPR's, would the wife's gain be exempt and the husbands taxable ?

No they can only have one. When she made the claim he should have as well.

- if this is the case could we transfer the property all into the wifes name before sale and her claim it as her PPR ?

No as above.

When you say "lived in both at various times over the last four years" to what degree and how were changes in address covered - notify HMRC, banks, councils for tax etc., or just moving between the two as they saw fit.

There might be some scope for a claim on a basis of fact without the need to make the elections, but it will require solid proof of changes in the residence that I suspect will not be available.

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By TaxationPete
30th Sep 2010 16:36

PPR

I concur, both must be party to the election or it fails. It may in fact not be financially advantageous to loose the PPR on the London property. Without numbers it is difficult to evaluate. There are examples of two properties and PPR on the HMRC web site but as has been detailed the election was not valid. Regards Peter

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By cathygrimmer
01st Oct 2010 10:06

Invalid election

Section 222(6) TCGA 1992 says that the election under s222 (5)(a) must be made by both husband and wife to be valid. So it will be a question of looking at the facts to establish whether the Cornish property was occupied as the main residence at any time to qualify for total or partial PPR.

Cathy

[email protected]

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By ACDWebb
01st Oct 2010 10:24

Indeed

And before heading off on a wild goose chase have a read of http://www.taxjournal.com/tj/articles/p-favell-v-hmrc and, if you can find it, the full case report.

Reading it the taxpayer tried to make a claim fly but failed in providing back up evidence that could not fairly easily be shot with holes by HMRC

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