PPR

System
System Posts: 100,534 🤖 Admin 🤖
edited 12:08PM in AAT member discussion
Hi you lot

A quick and easy question that I seem to be talking myself into knots over.... didn't help someone calling me when I was only just up this morning, and not even had any coffee.

Bloke got left a cottage by uncle (wish I had one of those). He has never lived in it, and is now going to sell it. He can't elect for it to be his PPR and then sell it - can he?

He spends half the week with his poorly mum and other half with his partner, so technically he doesn't have a "home"

Does anyone know how long he would have to live in the property for it to qualify as his PPR?

Thanks

Claudia


Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PPR

    In short, no.

    If he has never lived there then no PPR.

    It is the quality of residency rather than the length that HMRC will be concerned with. As a general rule, 1 year will be sufficient, 6 months may be contended.

    Providing the cottage is not let to tenants AND he can reasonably live there AND does in fact live there for at least some of the time (even if only every now and then) then he could make an election for the property to be treated as his main residence and then revert the election back to his existing residence 1 week later. This would be sufficient to get PPR for last 3 years ownership plus any let periods.

    An alternative ploy that I know has been used before is to get the builders/decorators in at your main residence rendering it unreasonable to live there during that 2/3/4 week period and move into the cottage. The cottage then becomes your main (and only liveable) residence and thus you qualify for PPR without the need to make any election. Providing you keep a record of the work done at your other home, and utility bills at the cottage, then you should be able to prove the claim at a later date if necessary.

    Hope that helps!


    P.s. Is there an actual gain on the property? Has it been held for quite a while post probate?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PPR

    Thanks Dean

    I cant think straight before cups of coffee :lol:

    He has made a gain of about £100K, so it worth his while exploring all the avenues.

    I like the decorators ploy - simple, straightforward and non-negotiable!

    In my eyes, when you start making elections, it starts alarm bells ringing at HMRC :shock:

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PPR

    The thing I love about the varying election is that HMRC tell you how to do it using that exact example on their website here.

    In fact, that might be my favourite web page of all time!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PPR

    Brilliant :wink:

    thanks Dean

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