Correct there was no CGT on the 2013 sale and he worked abroad for less than 5 years. He was based in the U.K. when he made the property sale in 2017.
I am trying to determine if he just gets PPR relief for just the last 18 months of ownership of that property or if he also gets relief on the new PPR from 2013 as part of a period of absence between 2011 and 2016 even though the PPR changed? He had lived in the original house as his PPR before going abroad and lived in the second house as his PPR before selling it in 2017. He did not live in the second house before the period of absence however my question is can the period of absence PPR relief be transferred from one PPR to another PPR if he sells and buys his main home whilst abroad? HMRC were informed of the change of PPR in 2013 and acknowledged it in writing to the client.
My understanding of the period of absence relief was that a tax payer should not be penalised on CGT for taking up a post abroad for a few years.
He occupied the original property as his PPR before going abroad but not the new property until he returned home. Are HMRC likely to accept that the new home just replaced the original home as his PPR whilst he was abroad and allow him to carry the relief for a period of absence abroad to the new PPR?
Ive just done a first CIS tax return for 18/19 and in TaxCalc and it used 52 weeks x 2.95
Just wondered as she didn't own another house for that 4 month period until the rental started whether it might be a deemed period; just thought it worth asking
Thank you very much. I did wonder about the 4 month period; she didn't own another house in that period I believe she moved in with her new partner and then it took 4 months to find a tenant. Is it worth claiming that 4 months and see if it is challenged (and advise client of potential risk of a challenge)
Thanks John & Tax Dragon. Totally agree with your caveat. I only have 2 LLPs amongst my client base and both very small so I have never developed much expertise in this area. Large more complicated LLPs I have declined - for obvious reasons!
Many thanks for the clarification .. with hindsight it’s obvious. Very helpful feedback!
I think what is being said here then is that if the Partners have been drawing the money out based on the business they have produced (for simplicity say 75/25) they can’t then report a different split say 50/50 to HMRC.
The Partners can decide whatever split they want but they can’t then report a different split to HMRC to reduce one of their tax liabilities.
Is that about it?
I am just working on the Accounts now and looking at options. No discussions with the client about this to date.
Just wondering what might be reasonable or feasible before suggesting anything to them hoping there might be some way to mitigate a bit of tax if possible and allowable.
The numbers are not huge. The company makes between 10,000 and 15,000 a year profit before pension contributions.
They didn’t make a contribution for the Director in the 2018 reporting year so it would seem from the feedback they could make one of say 20,000 in the current year 2019 which would create a loss and then carry the loss back to the 2018 reporting year and get a CT refund.