CGT and moving into the second property to reside

CGT and moving into the second property to reside

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A client married couple of mine had a second residential property that they rented

They then moved into this property to use as their PPR.

At that point they had made a capital gain of approx. £50k

Am I right in thinking that at that point a CGT liability crystallised?

If so, this was in May 2012, so how is the best way to approach the Revenue to disclose this without being heavily penalised?

Also can anyone advise what happened to the 3 year rule on PPRs.

Replies (7)

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By Duhamel
14th Oct 2015 15:10

The three year rule became 18 months only since 6 April 2014. I have no idea why you think a gain crystallised on moving into a previously rented property, although there may be a gain on the eventual disposal.

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By johngroganjga
14th Oct 2015 15:38

You seem to think a gain arises when a property becomes someone's PPR after a period of non PPR use.

It doesn't. A gain only arises when a property is disposed of. At that point the periods of use as PPR etc. will be taken into account in the calculation of the gain.

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By TaxationPete
15th Oct 2015 15:03

Did the couple sell their original PPR ?  Regards Peter

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By danielgricks
16th Oct 2015 09:33

Moving from one PPR to anothet

Thank everyone for their help and please excuse my ignorance in an area I don't normally go

Although they moved from one PPR to another, they rented the one they left

The one they rented was sold a year later

Is this year covered by the 18 month rule?

 

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By TaxationPete
16th Oct 2015 09:57

Yes it is. Where did the £50K

Yes it is. Where did the £50K come from. Regards Peter

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Replying to unearned luck:
By danielgricks
16th Oct 2015 14:22

the £50k

The £50k came from the difference between the price paid and the estimated value when they occupied it as PPR.

As you guys have pointed, is is not a gain for CGT but that year mat well be taxable wen the property is final sold

Many thanks again

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By TaxationPete
16th Oct 2015 14:56

But you said it was sold a year after they left it.  Regards Peter

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