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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Can we claim PPR relief against the capital gain made on a

Resolved Question:

Can we claim PPR relief against the capital gain made on a house (now sold) that we lived in for a period of 5 months whilst the house we normally lived in was being holiday let?
My wife and I jointly owned the house for over 20 years and during most of this time it was fully let.
We have two other houses - a jointly owned house (normally our main residence) and a cottage owned by my wife. We have lived in this house continuously for over 20 years with the exception that, each year we have moved out for a period of 5 months whilst we offered ‘furnished holiday letting’, actually letting for at least 10 weeks each year. Most years we moved into the cottage but a few years ago we moved into the other house (now sold) for 5 months
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

The conditions that have to be met for private residence relief are

the dwelling house has been your only or main residence throughtout your period of ownership and that 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.

It would appear from information provided that the house in question was fully let for most of the time you have owned it. You would certainly be able to claim private residence relief for the period it was your only and main residence. You say you have owned it for over 20 years... was it ever your main residence other than spells of few months a year.

The fact you moved into this property for 5 months whilst the house you normally lived in was being holiday let would not qualify you for private residence relief unless it has been your main residence in the past, I'm afraid.

More information on private residence relief can be found here

http://www.hmrc.gov.uk/helpsheets/hs283.pdf

There are examples of private residence relief on the helpsheet.


I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

is this because 5 months is too short a period to establish the property as a private residence eligible for PPR relief?

Expert:  taxadvisor.uk replied 2 years ago.

Norman, thank you for your reply.

5 months may not be too short a period to establish the property as a private residence eligible for PPR relief if factors support it.

HMRC would consider these to support your claim for PPR

- you should have made it a main residence with an intention to stay there permanently.
- you should communicate your intention to HMRC within given time frame that this property is your main residence.
- you should be on the local council electoral roll and pay council tax on that property.
- notify Royal Mail of change of address
- notify bank of change of address etc etc

Based on facts provided, I don't think you have a strong case to claim PPR on this property, I'm afraid.

I wish I could give you more favourable news.

I hope this is helpful

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4811
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 2 years ago.

Hello Norman

I notice you have viewed my answer to your supplementary question about Private Residence Relief (</spanCustomerLast Viewed on 11/15/2014 at 5:23 PM).

Just checking to see if you have any issues relating to your question that I may not have addressed.

Please let me know if I can be of further assistance.

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get credited for it.

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