CGT avoidance- switching PPR between houses

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    CGT avoidance- switching PPR between houses

    I have two small properties, one of which I live in and the other which has always been let. In order to be able to move nearer my family, I need to sell the let property, which is the more valuable. If I move into it for a while (haven't been able to find out if there's a qualifying period!), say 6-12 months, will I then be able to sell it free of CGT?
    Then, if I let my present residence for a couple of years, will I be able to sell that with exemption too, as it has been my main residence for almost 4 years?
    Any advice will be gratefully received - I have to get this right!

    #2
    It depends on purchase price, selling price, length of let time, how long owned, etc. If you move into the property and write to the revenue nominating it as your PPR (principal private residence) you get the last 36 months of ownership exempted. Not sure if this works though as you're moving in just before you sell. You get an allowance for the period that you let it out aswell - plus your annual CGT free allowance.

    If you let the property that you are currently living in you could claim exemption for the period that it was your PPR, an allowance for the period that you let it out, exemption for the last 36 months of ownership - plus your annual CGT allowance (as long as you haven't already used it).

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      #3
      You can't have more than one principal private residence, can you?
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

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        #4
        Originally posted by jeffrey View Post
        You can't have more than one principal private residence, can you?
        I read it that he is going to alternate his PPR. Inland Revenue could rule that it is a sham, if they notice. Was that a statement or a question, Jeffrey? Certainly not a double negative.
        Last edited by Paragon; 19-05-2007, 09:37 AM.
        ASSUME NOTHING - QUESTION EVERYTHING!

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          #5
          Originally posted by jeffrey View Post
          You can't have more than one principal private residence, can you?

          Hello Jeffrey. Appreciate your comment re PPR but if I told the IR (or whatever they're called now!) I wished to use the "let" property as my PPR, would they accept that? I thought you had to make that decision within two years of owning more than one property and I have owned both mine for longer than that.
          To be honest, I've had so many angles on this I think my head will explode, and until now I've thought that all you had to do was to live in the place for a while..........then sell.
          The thing is, I have to sell that property at a good price to be able to buy in a more expensive part of the country. The sale value of the property I live in right now is simply not enough to buy anything in leafy Warwickshire! (Where the rest of my family are)

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            #6
            May I suggest you post this on the tax forum where the expert accountants who contribute to this board will give you a more definitive answer.

            P.P.
            Last edited by P.Pilcher; 18-05-2007, 22:40 PM. Reason: typo
            Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

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              #7
              Nomadgirl,

              How long have you been letting out your property ? If you move into the let property and lived there for a year, you would get exemption for the last 3 years of ownership but not for the entire period of ownership. If you let for 9 years and lived in for 1 year, you would get exemption for last 3 years and 7 years of gain would be liable for tax but a tapering factor to reduce the taxable gain may apply.

              You should consult a qualified accountant in a face to face meeting to discuss the various options and the plan the best time to move house and minimise your tax bill.

              Comment

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