CGT - PPR working abroad

CGT - PPR working abroad

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I have a client who has only one property and, along with his wife, quit his job and moved abroad. He did this with the intention to find work abroad, rather than being sent abroad by an employer. He found work and has recently returned. If he sells his one property is he liable for to claim full PPR relief or could he only claim this if he had been sent abroad by his employer?

Thanks.

Replies (9)

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By User deleted
18th May 2013 19:45

How long was he abroad for?

And, by the sound of it, he is living in the property again - is that correct?

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By brian.barrett
19th May 2013 23:10

Doesn't Matter

The tax law TCGA 1992 s223 is quite specific on the definition of periods of absence.  You only need to be working, and for those duties to have to be done outside the UK (and will Scotland be valid as outside the UK in coming years?).

So - if you went abroad and worked for part of it, then you will be able to treat your time working abroad for PPR, plus anytime upto 3 years.  In addition, the last 3 years of ownership are available for PPR.

Do note, however, that you do have to return to the house at some stage for the period abroad to be classed as available for PPR relief.  If would appear that you have already done this, so you have fulfilled this requirement.

So if you lived abroad for 6 years and it took you 1 year to find work, then 5 years would be covered by the fact that you were working abroad, and 1 year would be covered by the general 3 year absence allowance.

Finally do note that if you decide to move out of your house now, you would have a further 3 years in which to sell the house and all that time would also be available for PPR.

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By TaxationPete
20th May 2013 10:13

"that you do have to return

"that you do have to return to the house at some stage" there is an exception to that if your new work in the UK prevents you from returning to the property. Usually it is a location that causes this. Regards Peter

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By joseph.cox
20th May 2013 11:23

Thanks a lot for the help.

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By joseph.cox
20th May 2013 11:43

Also I am wondering, what if the client has not moved back into the property but is now living in rented accommodation elsewhere? Will this jeopardise his PPR relief claim? I know if he could not move in due to work restrictions it is still valid, but what if he could not move back in as it was being let while he was away and the tenancy has not yet expired. Therefore he is technically unable to move in now. What if he is intending on moving back in after the current tenancy expires?

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By brian.barrett
21st May 2013 10:50

Intending??

I think we would all be paying very little tax if we able to use the 'intending'!

I think, as TaxationPete says, it is only if the location of your new work prevents you doing this.  Remember we only consider the PPR when selling, so if currently let we can still move back in afterwards.

And, of course, there is also Lettings Relief if let which is the lower of:

- £40k

- the amount attributable to the time when let

- the amount that woud be allowable under PPR if you were living in the house rather than letting.

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Replying to Mr_awol:
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By joseph.cox
21st May 2013 10:55

So if the client moves back in in July and sells the house in say September, would he be able to claim the full PPR as he was working abroad or would this have been invalidated as he did not move straight back in when he returned?

I completely forgot about lettings relief, thanks for that!

 

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By TaxationPete
21st May 2013 11:59

HMRC would consider the tenancy agreement to be a valid restriction but would expect the LL to issue notice to the tenant. Assuming the owner then moves back in there is not a problem.

To clarify there is no LR in this senario as the entire period is deemed residency

 

Regards Pteer

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