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Principle Private Residence for Emigrations

PPR for clients who have emigrated so no longer UK-res. Still use it as a UK base when returning.

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I have a client who emigrated to Australia in 2012 following the extention of a 12 month work contract which became permanant. They bought a property in the UK in 2006 and became Australian Residents in 2012. The property has been sold in March 2022. They haven't rented the property in the 10 years since becoming Australian residents as they have used it as their UK base when they return every few months. Would this qualify for Principle Private Residence Refief (PPRR) for CGT purposes for the entire period of ownership?

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By Catherine Newman
23rd Mar 2022 17:55

My gut reaction is Yes. I have clients who spend a lot of time overseas and still keep their properties empty. It is their PPR.

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By Wanderer
23rd Mar 2022 18:31

Personally I don't generally rely on my or anyone else's gut, much better to base a view on the law.
Before asking any further questions how many days are these non residents spending in this UK property each tax year?

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Replying to Wanderer:
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By Oliviamcmullin
23rd Mar 2022 22:06

Further context:
In the past 2 tax years very few days due to covid travel restrictions. 20/21 would have been no days as Australia banned travel & 21/22 about 30 days in the UK. On a normal year more like 90 days as they return every 3-4 months.

They file a UK self assessment for other UK rental properties. But this one has been their residential address and never rented.

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Replying to Oliviamcmullin:
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By Wanderer
24th Mar 2022 02:36

Have you considered S222B(3) TCGA 1992?

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Replying to Wanderer:
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By The Dullard
24th Mar 2022 12:41

As for Justin, have you considered the potential impact of s 223(3)(b) on s 223B?

The OP said they had a contract (of temporary employment perhaps?) which became permanent.

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Replying to Justin Bryant:
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By The Dullard
23rd Mar 2022 21:48

If they make the disposal while not UK-resident, the nomination can be made at the time of disposal. (s 222A). And, if UK resident at the time of the disposal, we don't know that ESC D21 won't be in point.

Also, s 223(3)(b), which will trump s 223B, hasn't been ruled out by anything in the OP.

So based on the pertinent information with which we are provided (SFA), how unlikely do you really think it is, linkmeister?

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Replying to The Dullard:
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By Justin Bryant
24th Mar 2022 10:22

You're sounding like PNL and on a PPR question too, so well done there! I'm aware of s223(3)(b) (as are most people here I hope) and one has to make some assumptions on an internet forum (such as he does not drop dead tomorrow and get CGT MV rebasing etc.).

Just to be clear, my main point was assuming UK residency they have this potential problem (that I agree does not seem to apply to non-UK residents due to some legislative oversight possibly):

"It allows a late nomination for a period of time, provided that all but one of their residencies during that period had a negligible capital value."

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64500

This is replicated in s 222(5A) TCGA 1992 as follows:

"[(5A) But a notice or further notice under subsection (5)(a) determining which of 2 or more residences is an individual's main residence for any period may be given more than 2 years from the beginning of the period if during the period the individual has not held an interest of more than a negligible market value in more than one of the residences.]8

8. Sub-s (5A) inserted by FA 2020 s 24(1), (2)(a) with effect in relation to a notice given on or after 6 April 2020."

Noted re s222A(2),(6)(a) (a good point that I was aware of), but that is still subject to the above 90 day issue in ss 222B, 222C, which was my other main point.

If they are non-UK resident now they may get April 2015 MV rebasing (if no (full) PPR) if they were non-UK resident on 5.4.19 I believe.

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Replying to Justin Bryant:
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By Justin Bryant
28th Mar 2022 10:12

I'm sure everyone knows the requirement to live in the property again before selling it for the potential overseas work PPR relief. See:
https://www.cronertaxwise.com/community/tqotw-non-resident-ppr-return-uk/

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65040

Such a non-UK resident seller could opt out of April 2015 MV rebasing, although the above example does not make that potential interaction clear and (possibly for simplicity, especially considering the 90 day rule) assumes the taxpayer sells when he resumes UK residence. See:

https://assets.kpmg/content/dam/kpmg/pdf/2015/04/changes-to-principal-pr...

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