PPR ... calculation of capital gain and determination of facts re 2nd residence

April 2000 - Janet and Bob purchase a flat for £83,000. Bob moves in then. August 2000 - Janet and Bob marry. Janet moves into the flat.

April 2006 - flat is re-mortgaged - this time the mortgage and lease put in Janet's name alone. August 2006 - They leave the flat as Bob has a job in another town. Flat is put on the rental market, and a property rented in the new town. December 2006 - tenant is eventually found. Flat is let until sale in December 2011.

May 2007 - 2nd property - a house - purchased in new town.

August 2011, they move again, letting the house (2nd property) immediately, and putting the flat (1st property) on the market (having added Bob's name to the lease again). December 2011 - flat is sold for £150,000.

Janet and Bob did not make an election as to which is their principal private residence, and I'm now trying to sort out their SA returns.

Total gain is £67,000, being £150,000 less £83,000. This accumulated over 140 months (about £478/month). 

1) Administratively - should I try and establish what their principal private residence is/was with HMRC before submitting the SAs, or can I do it at the same time (via letter, or in the white space). The house is now their principal private residence, although they are renting away from home now while at university.

2) Until May 2007, when the 2nd property is purchased, I'm minded that the flat is the principal private residence. Thereafter, in the absence of an election within two years to keep the flat as PPR, the house would seem to be the obvious PPR.

3) Is there a CGT liability for either Janet or Bob, or are they both covered entirely by PPR relief and Lettings Relief? 

Grateful for your thoughts.

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PPR and Lettings Relief calcs

vicadm |

Question of fact

mhtax |