My client has rollover relief, 1996,on a FHL (deemed purchase £2K, value now £850K) but the property no longer meets the rules to qualify as a FHL. If he makes a PPR election I assume he will loose his entrepreneurs relief. What is the CGT position or can you point me in the right direction.
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Can you be more precise. ER is only due where there is a gain, and a gain arises where there is a disposal or a deemed disposal. There is no bar to claiming both PPR and ER if there is a disposal and the qualifying conditions for both reliefs are met. If however you mean that the owner is going to occupy the property as his main residence there would be no disposal and therefore no gain to which ER could apply.
Can you be more precise. ER is only due where there is a gain, and a gain arises where there is a disposal or a deemed disposal. There is no bar to claiming both PPR and ER if there is a disposal and the qualifying conditions for both reliefs are met. If however you mean that the owner is going to occupy the property as his main residence there would be no disposal and therefore no gain to which ER could apply.
No. There has to be a CGT disposal that gives rise to a gain and the cessation of the FHL trade does not trigger a disposal or deemed disposal.
So he wants to pay CGT on a gain that doesn't exist? I dare say HMRC will be happy enough, but it won't mitigate CGT on the eventual disposal.