Principal Private Residence relief on sale of part of property

Posted by Amanda Lambert PM | on Sat, 28/08/2010 - 19:23 701 3 comments | report

My client sold part of his home a few years ago which I would assume is covered under the Principal Private Residence exemption. However, he is now incurring costs on another part of the property, with a view ot selling this part as a 4 bedroomed house, and his intention is to remain in the rest of the house. My feeling is that this sale will not be covered by PPR and there will be a gain on the difference between the proceeds and the costs involved in developing that part of the property.

Does anyone have any comments on my thoughts?

Greatly appreciated.

Thanks

Amanda L

Comments

Unclear

TaxationPete | Sun, 29/08/2010 - 10:57 | Permalink

It is unclear how he is seperating part of the property as stand alone house. Was this all one property and has he lived in all of the property as his home.

I will give you an exemple, An owner of a semi bought the property next door and knocked through and lived there as growing family. Years later they re-established the acquired part as a semi again and sold it. PPR was granted . Regards Peter

Re PPR on sale of part of property

Amanda Lambert | Sun, 29/08/2010 - 17:45 | Permalink

Peter

Thanks - I think you are correct in that the part sold is eligble for PPR, but I only think that this would apply for the last 36 months of ownership of that part of the property. If that part of the property is sold after 3 years, then I would think that there is a gain for the period exceeding 3 years after development takes place?

Amanda

PPR - Thanks for responses

Amanda Lambert | Tue, 31/08/2010 - 13:45 | Permalink

Thanks for taking the time to respond. I shall apply PPR to the periods of occupation and last 36 months of ownership for the part sold, with remaining periods chargeable, if exceeds 3 years.