Main residence relief

is there any precedent on this?

Didn't find your answer?

a couple each had their own residence and then they bought one in their joint names, is there any precedent that states that this would automatically be their main residence. I ask because it was knocked down and rebuilt over 2 years and a large gain was made a further 2 years later when they sold after they received an offer they couldn't refuse. I have read Claritax's main residence relief  and can't find much about it there. I am also aware that HMRC treats short periods of non occupation after purchase but before moving in as a valid period of ownership see also Higgins v R&C, does anyone have any comments or need further info as I wish to try and reduce the non PPR time. Thanks Nick

Replies (11)

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By Tax Dragon
26th Sep 2017 21:31

The easy answer is no, there is no precedent that states that somewhere they were not living (and, presumably, had not previously lived) would automatically be their main residence. More information might help us help you though. Things like whether they're married/equivalent (and when), where they lived (and when), whether they sold the other properties (and when). In short, a timeline of events relevant to PRR (not necessarily limited to those few I have mentioned).

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By carnmores
27th Sep 2017 07:49

thanks, i was aware that more info was possibly needed i was perhaps wrongly focusing on the point about joint ownership.

Yes they are married . Property X bought by 'A' in June 2010 and sold in Aug 2015. Another property Y purchased by 'A&B' in Aug 2013 and knocked down and rebuilt and occupied in Dec 2014 and sold in Jul 2017. 'A&B' lived in 'A' while the family house was being rebuilt. i am trying to find a way if thee is one to get Y established as the main residence as no election was made.

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Replying to carnmores:
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By Tax Dragon
27th Sep 2017 09:47

Higgins doesn't help. In that case, the flat was used as a residence as soon as there was a right to occupy. I believe 'occupy' here takes its legal sense, and, legally, your clients occupied Y when they bought it. How else would they be able to knock down one house and build another?

ESC D49? Doubtful, but just possible. Why did the period exceed a year?

Aside from that, you are struggling.

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By Matrix
27th Sep 2017 08:06

Did they claim PPR on the sale of X? If so then how can Y be the PPR during the entire period of ownership. The earliest would be Dec 14, since, in my view, you would have to look at the facts, so where they actually lived, in the absence of an election.

Edited since I got the X and Ys and A and Bs mixed up.

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Replying to Matrix:
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By carnmores
27th Sep 2017 09:31

they did claim PPR on X this impacts obviously on the Y gain , my view is that they should amend, if allowed, as in 15/16 subject to last 18 months rule following Higgins & D46

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Replying to carnmores:
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By Tax Dragon
27th Sep 2017 09:49

Amend what?

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Replying to Tax Dragon:
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By carnmores
27th Sep 2017 09:59

thanks for your help , amend the 2015 16 tax return to amend their part PPR claim on original purchase X ! it was their decision to claim PPR as they said they would never move again....... the gain on Y is huge and they want to know if they can retrieve in part the situation. i have told them its unlikely but i want to cover all bases. Y was knocked down and rebuilt over 2 years

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Replying to carnmores:
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By Tax Dragon
27th Sep 2017 10:19

carnmores wrote:

it was their decision to claim PPR

No. PRR is not a claim. It either applies, or it does not. So I ask again, amend what? On what basis?

EDIT: and to what (intended) effect? How does it affect the relief on Y?

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By SteveHa
27th Sep 2017 10:06

What was the intention for Y when they first bought it?

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By carnmores
27th Sep 2017 11:30

Thanks am on the train to London at moment Will post or message later

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By Tax Dragon
27th Sep 2017 11:43

You too?

Per https://www.accountingweb.co.uk/any-answers/ppr-on-house-built-for-occup... Justin has a solution for your situation.

I suspect though that his question was hypothetical and his 'solution' available only with a different fact pattern (including - despite his OP - that sale has not yet happened).

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