I asked a question yesterday about PRR for my parents (stranded in NZ). (Thanks for the responses).
Another - a bit similar - query today.
Client went on an around-the-world cruise from 8 May 2017 to 25 May 2018. A very extravagent holiday, one might say, but a holiday nonetheless. HMRC say that holidays are not taken into account when looking at periods of absence for PRR purposes.
My question is? When is a holiday not a holiday? What turns a holiday into a period of absence?
Thanks.
Replies (13)
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Top of head answer (without much thought or any research): whether you have another place of residence while you are absent.
When you move the furniture to somewhere else. Or have your tax return delivered to another address.
You can't define it. You have to take in all the factors. FWIW, I don't think your clients who were held captive in NZ could be said to have left their home in the UK. For me, they were still resident there, regarded it as their home even though it was inaccessible.
It's not all about physical presence.
From HMRC's consultation document:
"A residence is the place where a person normally lives, their home, and has a
degree of permanence and continuity about it. This means, for example, that when a
person goes on holiday for a few weeks, PRR is not affected because the hotel where
that person is staying is not a residence of theirs."
How much of a degree of permanence and continuity would you regard their occupation of the cruise ship as having? Did they get mail forwarded there? What happened to their house when they were away?
It's not cut and dried, there will always be scope for different interpretations as each case is unique. You have to look at it yourself and decide how you interpret it. There isn't an actual definition of maximum holiday length.
What happened to their house when they were away?
That's a key point. If they rented it out for a year, it's not their residence as it's not available to them.
Loads of issues to consider.
I would agree with Lionofludesch as I have a client who has remained in New Zealand for almost a year unable to return due to covid situation (he is staying with his daughter), while absent he has had his son visit his house to collect post etc and the house has remained empty. I cannot see that this removes it as his PPR for this period as it is still clearly his home he is just forced to be absent.
Wycher wrote:
I would agree with Lionofludesch as I have a client who has remained in New Zealand for almost a year unable to return due to covid situation (he is staying with his daughter), while absent he has had his son visit his house to collect post etc and the house has remained empty. I cannot see that this removes it as his PPR for this period as it is still clearly his home he is just forced to be absent.
Thanks. Deemed residence (S223(3) TCGA1992) or actual residence (because ignored as it is a holiday)?
Jeez - you don't have to be physically present in the house all the time for it to be your residence. We'll be running scare stories about folk needing to keep a record of when they go to the pub (when they open) next.
Duggimon's consultation document extract: "PRR is not affected because the hotel where that person is staying is not a residence of theirs" appears to support my top of head, unresearched response to a degree.
However, since 2015, there's been a statutory definition of "period of absence": s223(7B) defines it as "a period during which the dwelling-house... was not occupied by the individual as a residence." You also need to read s222B(1) and some of the other 2015 changes. All bets are off and all replies so far (including my opener) are basically wrong, because they ignore the 2015 law.
So holiday periods of any length are regarded as a period of absence and so count towards the 3-year absence limit? That can't be right.
It could be right if that's what statute says. (I very much doubt it is what statute says. I've not worked it through - it's not as windy in these parts as it obviously is where you operate. I'd even forgotten it said anything at all. But the point is it does now include a definition, whereas before 2015 I don't think it did. So I think, now, you should have greater certainty.)