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PPR-Move to Nursing Home and Sink Fund Payment

Client with dementia moved out of main residence 4 years ago. CGT becoming an issue?

Client moved out of main residence flat several years ago when he moved into a nursing home and his leasehold flat has been sitting empty since.

It appears the empty flat can still be classed as his main residence for the final 36 months of ownership, with the one year gap just about covered by the CGT annual exemption.

According to the lease terms, on sale of the property 2% of the market value is to be paid into a sink fund. This will be a payment of around £5,000. I cannot see that this payment will be CGT allowable but can anyone confirm if this is correct or not.

I did not even consider making an election for main residence on the flat. Is such an election an impossibility for a vacant flat where there is absolutely no chance of reoccupation by the present owner.

 

 

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By Ruddles
20th Jan 2018 17:45

Even if the election were possible, you're too late.

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to Ruddles
20th Jan 2018 18:17

Yes. I had assumed I was too late. I had assumed that the flat was going to be sold shortly after client went into nursing home.
But there is no way the flat is a residence of the client anymore because he will never set foot in it again. I think that alone may inhibit the ability to make an election. ("So far as it is necessary to determine which of two or more residences is an individual's main residence etc. etc...............)
The client has dementia and the nursing home is about 300 miles from the flat.
I doubt my client could even leave the nursing home for a day out.

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