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Client purchased a property in 1990 which was mainly let until disposed of in 2009 (let for appox 15 years total).

No PPR election was made within the 1st 2 years of purchase of the property.

Client was not resident in the property until July 2008, at which time the client was resident in the second property for a period of 3 weeks while attending daily hospital appointments. The second property is approx. 2 hours drive from the main residence but 5 mins from the hospital. Revenue was informed of a change in PPR in relation to this period of residence.

In April 2009, client disposed of the second property claiming PPR for the final 36 months of ownership and letting relief to the extent of the PPR exemption, saving a modest amount of tax.

Unsurprisingly the revenue have opened a compliance check. My question is - is the PPR claim valid on the second property. My client was definitely resident for this period, but as he was outside of the 2 year window for making an election can he claim PPR?


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13th Aug 2010 10:46

PPR will be denied based on what you have stated. It is not the quantity but the quality of the residence that qualifies as defined by the courts. He did not move in lock stock and barrel as a quality residence and after this short period he moved back to his 'home'. There is also the matter of 'intention', it was never his intention to make this his permanent home. Regards Peter

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13th Aug 2010 11:07

Thanks Pete

What about the election under s222? If both properties were a residence, is this not vaild, having been made within 2 years of the second property becoming a residence. My limited understanding of PPR is that this election does not require the second property to be the main or only residence at the time at which the client resided there?

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By ACDWebb
13th Aug 2010 11:30

An election would not have been relevant in the first two years

The property was apparently let so not available or used as a second residence. There was only one residence, where he lived this other property was let.

The two year clock for an election would start when he stopped letting the property and he had two residences available, so might still be in time.

That then leaves the question of the quality of the actual use and availability alluded to by Pete. There is no minimum period for residence, so potentially there is a claim, but how did the use tie in with amongst other things:

letting of the property before, and possibly after - did the client know the hospital attendance was upcoming and have a tenant coming to the end of a lease, so took the opportunity to tie the two in?whether he was already in the process of marketting the property for sale when he moved in or not.

It is quality not quantity and you might have a case, but an uphill struggle to sustain it

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13th Aug 2010 13:18

Election (and lettings relief)....

I suspect unless there were sitting tenants in the second property when it was first purchased then an election should have been made then as it would have been available (there are some concessions regarding properties when repairs/maintenance required but assuming not then election probably should have been made back then).

As for lettings relief - you do need it as your PPR before and after the period of letting to be able to seems in this case at least one of those periods of PPR are missing if not both.

I would always suggest making an initial argument with the Revenue if you can justify it but in this case I wouldn't prolong any argument as it seems on the limited information available that no ppr/lettings relief was due...


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13th Aug 2010 22:20


There is no entitlement to either Lettings relief or any PPR

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14th Aug 2010 12:07


For completeness this comment is not correct :

"As for lettings relief - you do need it as your PPR before and after the period of letting to be able to claim"

There is no 'before and after' requirement. For LR you have to have resided in the property as your genuine home at some time during the period of ownership. This can be at the beginning, middle or end but the requirement is only for one period of ownership. The writter may have been thinking about claiming 4 years absence due to working elsewhere in the UK.

'Temporarily' living there does not make it his home or his PPR.

I dealt with a case earlier this year where the owner moved in after the last tenants left and he owned no other property but HMRC discovered the Property was put on the market when he moved in to 'do it up'. He sold it after about 5 months and claimed PPR and LR. As I had predicted HMRC rejected his claim to PPR and LR.

Regards Peter

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