Client lived in his elected PPR in Cheshire but was then posted abroad by his Company in 2011 on an initial 4 year contract. He lived in accommodation provided and paid for by his employer whilst abroad. He rented out his PPR in UK whilst abroad. In 2013 he sold his PPR in UK and immediately (same month) purchased another house in U.K. and requested HMRC treat this as his new PPR; HMRC confirmed acceptance of the new house as his PPR in writing. He then rented out his new home in UK.
He returned to work with his Company in UK in 2016 and moved back into his PPR before selling it in 2017.
Can he claim PPR relief for the whole of the period of absence even though his PPR changed in the middle of his period of absence?
Replies (14)
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I think the question here is whether is whether he occupied the new property as his main residence at all before renting it out, in order to meet the conditions at TCGA 1992 s223 (3).
S223(3) TCGA says "... if both before and after the period there was a time when the dwelling-house was the individual’s only or main residence".
Does that not mean the 2013 sale doesn't attract relief?
EDIT: Didn't see gainsborough had made the point first.
It wouldn't attract 'absence' relief.
But was it three years you got back then?
Any anyway the taxpayer was not resident in the UK.
There isn't a "Gum" case that means you get taxed on an exempt gain if you thought you were exempt for the wrong reason.
It wouldn't attract 'absence' relief.
But was it three years you got back then?
Any anyway the taxpayer was not resident in the UK.
There isn't a "Gum" case that means you get taxed on an exempt gain if you thought you were exempt for the wrong reason.
I shouldn't try and make a useful comment without properly reading the Q.
Yes, last 36 months were exempt for pre-6.4.14 PPR sales and that sale was before non-UK residents were charged on residential property sales as pointed out by Tax Dragon.
How does he qualify for lettings relief if the letting predates his occupation in the house as his PPR?
Sorry this was a reply to Gainsborough.
My opinion is no for the reason mentioned above (fails s223 (3) as no actual occupation before). However, the last 18 months will qualify and there is also letting relief available.
An exception exists if the accommodation abroad fell into the very limited job-related accommodation criteria. In that case, intention to occupy the second property would be enough.
Finally, if the sale took place in 2017, I assume that this is for determining whether a gain should have been declared on the 2017/18 tax return?
Also meant to add that HMRC will acknowledge a PPR claim at the time as it is made, but will not question the validity until disposal of the property (as per their internal manuals).
He gets PPR up to the time he want abroad plus the last 18 months and lettings relief for the period it was let, apart from the last 18 months. This will all change from April 2020