A full time employee owns a rented property aside from his own home. He bought a third property with the intention of re-furbishing it in his spare time and moving into it. However, in the absence of a decent offer upon his original home, he sold the one he has just re-furbished and made a handsome profit. The thing is he never lived in it and it remained empty during the two year period he refurbished it.
Do fellow readers consider this to be a capital gain or a trading profit? Could he claim PPR even though he never lived in the property?
Related resources
Replies (4)
Please login or register to join the discussion.
This may help
http://www.taxinsider.co.uk/534-Property_Development_Taxable_Trade.html
How can he claim PPR if he has never lived in the property? That is a complete no-go!
On the intentions as set out
and as a one time happening I should have said CGT but no PPR.
That may be difficult to prove if there were to be an enquiry, so any written evidence that can be gathered to back up the nebulous intention - say reasons given in a mortgage application - will help.
Do it more than once and in relatively quick succession and it will be tipping to IT
I agree with ACDWebb. Once
I agree with ACDWebb. Once only would probably point to CGT.
It appears that intention at the outset is everything.
Have a look at this old CTA exam question from November 2009
http://www.tax.org.uk/Resources/CIOT/Documents/2010/02/Advisory%20OMB%20(N09).pdf
Mr and Mrs Taylor.