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Does renting a property affect PPR election?

Is a PPR election required if property is let?

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Hi all

A client lived in his flat for several years then moved to the US for work. He rented out his UK property while abroad and then moved back on his return to the UK (4 years later). He then sold the UK flat approx 1 year after that.

He was renting a property in the US while working there.

I am aware that renting a property to live in does give him an interest in that property . Am i correct that as his UK property was rented out for the majority of his time abroad, it was therefore not available for his use as a residence and no PPR election was required? On this basis the full gain on the UK property would be covered by his PPR exemption (due to the deemed occupation rules)

Many thanks

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By David Ex
05th Nov 2021 17:30

I always thought the election was for people who had more than one residence. Pretty sure that assumes availability for use which letting would prevent.

Do you still have a taxable gain after all the various reliefs?

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Replying to David Ex:
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By DonDan
05th Nov 2021 17:37

If the deemed occupation period when abroad does not apply (as no election was made when moving to the US) then there would be a taxable gain, though not too sizeable. I also was not made aware of the sale of the UK property (back in December 20) so if there is a taxable gain then there would also be late filing and payment penalties for the non-submission of the real time CGT reporting.

I agree re the interpretation of the "assumed availability" of the rented out property but i'm not 100% sure

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Replying to DonDan:
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By David Ex
05th Nov 2021 17:49

DonDan wrote:

If the deemed occupation period when abroad does not apply (as no election was made when moving to the US)

Is an election required? No idea but if the client, as a fact, moved overseas for work then is that not sufficient? Is the relief in primary legislation?

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Replying to David Ex:
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By David Ex
05th Nov 2021 18:13

David Ex wrote:

I always thought the election was for people who had more than one residence. Pretty sure that assumes availability for use which letting would prevent.

Appears to be legislation on the matter now. Haven’t read it so no idea if it’s relevant to your case.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64577

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