Principal Private Residence

Opting to pick PPR

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Client inherited a property. She does not own a property of her own. Moved into the inherited property for five months but didn't like it, moved out into Rented Property and rents the inherited property. Can she opt to make the inherited property her PPR?

 

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By possep
07th Aug 2023 13:53

Not while it is rented. Numerous other matters to consider in the future including quality of occupation.

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By Hugo Fair
07th Aug 2023 21:44

OP: before getting confused by everyone's (including mine) maunderings below, you might want to revisit what PRR actually stands for ... Private Residence Relief.

It's the 2nd word that's particularly pertinent here - as per:
"You do not pay Capital Gains Tax when you sell (or 'dispose of') your home if all of the following apply: you have one home and you've lived in it as your main home for all the time you've owned it. you have not let part of it out - this does not include having a lodger."

Of course there are lots more elements to consider but, for the avoidance of doubt, you cannot treat a property in which you are not residing as your residence!

Also, the concept of "opting to make (a) property her PPR" is only applicable where the person owns and lives in more than one residential property - in order to determine which qualifies as their principal residence for PRR purposes.

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RLI
By lionofludesch
07th Aug 2023 13:58

For the period she lived in it, yes. It'll save her a few quid in CGT on the eventual sale.

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By David Ex
07th Aug 2023 14:09

lionofludesch wrote:

For the period she lived in it, yes. It'll save her a few quid in CGT on the eventual sale.

House prices can go down as well as up! ;)

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paddle steamer
By DJKL
07th Aug 2023 15:18

Only in the short term (10 years), in the long term they tend to march onward and upward .

For my first house purchase in 1985 I borrowed £14,500, tomorrow my daughter sees if she has bought her first property (jointly with her other half, his second), borrowing between them £270,000

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By lionofludesch
07th Aug 2023 15:25

Has she thought about living in Horden, Co Durham? You can get a house for £5000 there.

Looks a carp place to live, though.

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By David Ex
07th Aug 2023 16:01

DJKL wrote:

Only in the short term (10 years), in the long term they tend to march onward and upward .

Then the OP’s client will have a nice taxable gain on top of the taxable rent received over the years while paying rent to someone else (if that’s what the OP meant)!!

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Replying to David Ex:
RLI
By lionofludesch
07th Aug 2023 16:21

I have to say, I'd be thinking about selling the house and buying one of my own to live in.

But - all depends on numbers and circumstances.

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By David Ex
07th Aug 2023 17:11

lionofludesch wrote:

I have to say, I'd be thinking about selling the house and buying one of my own to live in.

But - all depends on numbers and circumstances.

Indeed. Assumed quite a bit from the OP.

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By Hugo Fair
07th Aug 2023 21:35

'Appen sale price of inherited bungalow in Darlington won't cover required deposit for one-bed flat near where she works in Docklands. Mebbe, mebbe not!

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Replying to lionofludesch:
By Ruddles
07th Aug 2023 18:06

Assuming that, given the short period of occupancy, she can convince HMRC that her intention at the outset had been to live in the property on a “permanent” basis.

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