I have recently taken on a client who has lived in rented accommodation for many years. He also owns a property which he has continually let since he purchased it about five years ago. He is now considering selling this property to fund his retirement.
As he has had no period of occupation only or main residence exemption will not apply but if he does occupy it for a period with an air of permanence this will, presumably, enable him to claim the final 18 month period as being exempt in addition to the period of occupancy plus the lettings exemption. But is there anything which can be done at this stage insofar as the prior period is concerned?
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Not quite
If any of the period of residence overlaps with the last 18 months of ownership, he cannot claim that overlapping period of residence in addition to the last 18 months of ownership.
Also, lettings relief will be restricted to the lower of the the amount of PPR relief and £40,000.
No - there is nothing he can do now about the prior 5 years of letting apart from the lettings relief.
Beware
If his intention is to live in for a short period of time, but actually his plans are to sell, HMRC could very well argue that he never intended to make this his permanent residence. This would especially be the case if he still kept his current rented home and/or placed his freehold property on the market before moving in.