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We’re going to be carrying out some maintenance work on the AAT discussion forums (forums.aat.org.uk) on Tuesday 30 September 2014. What this means for you:

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PPR and lettings relief Page Title Module
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  • PPR and lettings relief

    With reference to http://www.hmrc.gov.uk/helpsheets/HS283.pdf

    If someone fulfils the following criteria and gets PPR:

    "Job-related accommodation
    If you live in accommodation that is job-related and you also own a dwelling house that you intend to occupy as your only or main residence, the dwelling house you intend to occupy is treated as actually being occupied by you as a residence during the period in which you intend to occupy it, even if you never actually live there. This means that you may nominate that residence as your only or main residence and get relief on the whole or a part of the gain. Please see the paragraph headed ‘Only or main residence’ on page 3. If your intention to live in the dwelling house ends, then the dwelling house is no longer treated as your residence. Accommodation is job-related if it is exempt from Income Tax for the reasons set out in Helpsheet 202 Living accommodation."

    And they fulfil the following criteria and get PPR:

    "However, you will be entitled to full relief where all the following
    conditions are met:
    • the dwelling house has been your only or main residence throughout your
    period of ownership, and
    • you have not been absent, other than for an allowed period of absence or
    because you have been living in job-related accommodation, during your
    period of ownership
    • the garden or grounds including the buildings on them are not greater than
    the permitted area, and
    • no part of your home has been used exclusively for business purposes
    during your period of ownership."

    My question:

    If they let that property out while they were living in job related accommodation, does the gain still have to be apportioned for the let period as you would with a normal house where you live in it a bit and let it a bit? Or do the above rules trump the letting rules?

    I can't work out whether it does or not.

    The two paragraphs quoted seem to say that they can have PPR, let or not.
    Professional Tea Consumption Technician
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    Hi Monsoon

    methinks you should write a book
    ^^ I am

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  • #2
    Hello Monsoon,

    This is tricky, but I don't think that letting the house out for part of the time would stop the client being eligible for PPR, as it's not a full-time business and they seem to fulfil all the criteria; I would have thought they could claim the PPR but then of course they would be liable to income tax for the rental income. I would check with HMRC though.

    Hollysan

    Comment


    • #3
      Originally posted by Monsoon View Post

      If they let that property out while they were living in job related accommodation, does the gain still have to be apportioned for the let period as you would with a normal house where you live in it a bit and let it a bit? Or do the above rules trump the letting rules?

      You need to first decide deemed and actual occupation. Job related accommodation period is deemed occupation, hence it overrides let period. However, I need to check whether you require a "sandwich" in order to get job related accommodation.

      Comment


      • #4
        Thanks

        The job related accomodation is a definite, it qualifies. There was no actual occupation (but deemed occupation applies, it's fine, I'm 100% on that bit).

        If "Job related accommodation period is deemed occupation, hence it overrides let period" is correct, this is what I'm looking for
        Professional Tea Consumption Technician
        ___


        Hi Monsoon

        methinks you should write a book
        ^^ I am

        How do I know what to charge? [/b] (+other MIP blog posts)

        MIP Fees Survey Results

        Comment


        • #5
          Originally posted by Monsoon View Post
          Thanks

          The job related accomodation is a definite, it qualifies. There was no actual occupation (but deemed occupation applies, it's fine, I'm 100% on that bit).

          If "Job related accommodation period is deemed occupation, hence it overrides let period" is correct, this is what I'm looking for
          It definitely overrides, as deemed occupation gets priority over lettings relief. Same apply to last 3 years (36 months) always deemed occupation, even though part of that period (from last 3 years) was let period.

          John
          Last edited by Jmann; 24-08-11, 12:48.

          Comment


          • #6
            Fabulous, thank you very much
            Professional Tea Consumption Technician
            ___


            Hi Monsoon

            methinks you should write a book
            ^^ I am

            How do I know what to charge? [/b] (+other MIP blog posts)

            MIP Fees Survey Results

            Comment


            • #7
              Originally posted by Jmann View Post
              Same apply to last 3 years (36 months) always deemed occupation, even though part of that period (from last 3 years) was let period.
              I agree with the above but, as an aside, there is actually some contention over the last 36 months that has not yet been tested in the courts.

              According to certain tax commentators you can claim both deemed occupation and lettings relief for those last 3 years where you have chargeable periods to expunge.

              I have done this once where the tax saved was significant. Otherwise I would generally advise against as HMRC do not share that same interpretation.

              Comment

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