PPR Question on Converting home to flats and selling one.
A client owms & lives in a property and has done for about 4 years. This is his only property. During that time he has gradually been converting the house into 3 Flats(A,B,C). The first completed flat is the one he has been living in while he completes the other two.
Upto now there has been no separation of the title deeds. What is now happening is that the client is selling the flat he is living in (A) and moving into Flat B and, pro-tem using Flat C as a Home Office and has no plans to rent it out. Planning B + C to be long term holds.
As he sells (A), this triggers the time for the Freehold to pass to a Flat management Co. and for 3 units to legally exist rather than the original 1.
My thoughts are that the sale of Flat A is his PPR and thus doe not potentially attract CGT. Flat B becomes his PPR.
Flat C is not part of his new PPR - CG64305 - and will be a taxable disposal if he sells it at some future date.
It would be prudent at this stage to have a professional valuation of Flat C as a base cost.
Am I on the right track? Thanks
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