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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13868
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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1. In 2000 we bought a flat and was let until

Customer Question

Hello,1. In 2000 we bought a flat and was let until February 2015.
2. The flat is jointly owned with my wife.
3. On 02/03/2015 my wife and I moved into the flat and used it as our main residence. We moved all our correspondence address, furnitures, etc, BUT we did not notify the HMRC about the change of circumstances.
4. On 20/04/2015, the flat was sold.
5. As soon as the flat was sold we moved into rented accommodation, where we stayed until November 2015.
6. From 2003 until June 2011, w elided in rented accommodation, but owned another property, lets call it Main House.
7. In June 2011 we moved into the Main House, where we stayed until 02/03/2015, when we moved into the flat, as mentioned in (3) above.
8. From November 2015 we have moved back into the Main House.
9. The Main House was nominated as our Main and Principal residence in November 2007.My questions are:
1. Can we nominate the flat as our main residence by sending a letter to the HMRC now? We are within the 2 years period from the change of circumstances (but of course the flat was sold one year ago).
2. Based on the facts I mentioned above, can we claim PPR and lettings relief when we calculate the capital gains tax liability for the sale of the flat?Many thanks
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi Thanks for your questions - I am Sam and I am on eof the Uk tax experts here on Just Answer.1. Can we nominate the flat as our main residence by sending a letter to the HMRC now? We are within the 2 years period from the change of circumstances (but of course the flat was sold one year ago). No as the flat has now been sold - the nomination has to be made within 2 years of the latter purcahse which would have been from the main house so by June 2013 (and even if within the time limit - it also has to be before the said property has been sold!) 2. Based on the facts I mentioned above, can we claim PPR and lettings relief when we calculate the capital gains tax liability for the sale of the flat?No - I am afraid not as HMRC will not consider the 1 month you lived at the flat to qualify as due private residence relief,a s clearly you moved into the flat merely to train and gain tax reliefs to reduce the capital gain.For this to be considered you would have needed to also let out the main house or sold it rendering it impossible for you to still be treated as having the main house as your main residence from June 2011 Let me know if I can assist further Thanks Sam
Customer: replied 1 year ago.
Sam,Many many thanks. Lets take this a bit further please:Your answer in question (1) is very clear.Question 2: I argue that we did not move into the flat to gain only the capital relief. It was a decision that we took with my wife, because based on the circumstances at that time, we thought that moving into the flat would be better for us. The Main House has been continuously let since we bought it in 1998. From June 2011, we have been living in 3 of the rooms of the Main House and let out 2 to 3 rooms. So we have been sharing the Main house with tenants. This is one of the reasons why in February 2015, we decided to move into the flat - since we wanted to be more independent. And, as I mentioned in my previous question, after the flat was sold we did not move back to the Main House, but we moved into rented accommodation (another self contained flat). And we continued to let some of the rooms of the main house.
Also, we are now selling the Main House.Finally, an important point, but which is difficult to demonstrate due to lack of records: In Easter 2003, we stayed in the flat that was sold in 2015, for about 6-7 weeks, because at that time we were refurbishing another house that was sold in summer 2003. And since 2003 we have been living in rented accommodation, even though we owned the Main House.Based on the above facts, do you think we can ask the HMRC to consider giving us the reliefs for the sale of the flat? Your help is much appreciated!Many thanks
Expert:  Sam replied 1 year ago.
Hi You can certainly ask HMRC to consider whether they would allow the one month - but in my expert opinion (and I am ex HMRC and sued to make decisions such as this) I would be highly surprised if they allowed this - but note even if they do - you will get 1 month/total ownership as Private residence relief and only the same amount for the private lettings relief (as this will be the lesser amount considered) x 2 (for each of you) plus of course the allowable £11,100 exemption allowance each (which is due whether you qualify for reliefs or not) I cannot comment on the 6-7 weeks in Easter 2003 but this seems to be all quite a mess including the main house which you now state you have held rented accommodation for the whole time yet also state that you moved into the main house since June 2011 and moved out of the main house to get some independence - hence the reason you moved into the flat for 1 month.And if you wish me to spend furtehr time on the whole picture then I can either offer you additional Q & A time of you should list this as a new question (you can always ask for me if you would prefer) but both will incur additional charges for additional help(although at least an allowable expenses against the rental income!) I hate to be so pedantic but the timelines do not support the facts you give - as this is what HMRC will look for in your information to support any argument re the flat (let along the complication to come for the main house) All I can suggest is that you write to HMRC asking for guidance as to whether this one month can be permitted - to allow that as relief for PPR and then the same amount considered for PLR - its a small amount but I accept better than nothing Let me know how you wish to proceed but it would be appreciated if you could rate me for the level of service I have provided with your initial question (or click accept) Thanks Sam
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Customer: replied 1 year ago.
Sam,Many thanks.1. I have rated you (and added a tip) as well - I am very satisfied with your service.
2. I opted to get the "unlimited questions" option - 7 days free trial and then £47 or so per month. Doesn't this service cover unlimited questions to you? I am not sure I understand what the additional Q&A time you mention, relates to. Please let me know and I will proceed accordingly, since I value your opinion.
3. Once we sort out the point (2) above, I can then write again in a new question, the facts, including the picture with the Main House, etc to ensure that there is no misunderstanding and then get your advice.many thanks
Expert:  Sam replied 1 year ago.
Hi Thanks for your response Yes you will get unlimited service but you still have to list these as separate posts (so the option of furtehr Q & A time would cost you additional fees which we would want to avoid as you have signed up for a subscription) or we experts dont get any credit from Just Answer. So any one post would constitute you getting the answer you seek for that post - but if you wished to expand this further or add a further variable, then the only way we experts are credited for this additional time is if you post a new question. I appreciate this is a very loose explanation but I am sure you can see if on one question thread, on which a set payment had been made, then extended fully across the whole rage of topics (in your case) might then see to need advsie on - then we experts would just get that one consideration for all the work But you do seem to get the gist of it, as per your repose !As per point 2 - this then goes into having to establish the whole picture as to whether these 6-7 weeks in Easter 2003 would be allowable as as this is a new variable, this would need to be listed as a new question (rather than me offering additional Question and answer time - which would cost you over and above the subscription fee you have paid) Thanks Sam
Expert:  Sam replied 1 year ago.
Hi Just to let you know my first appointment of the day has arrived early! So I shall be unavailable for about an hour - if you wish me to continue to assist and are happy to wait - then if you just advsie any other experts you are happy to wait for me - then they will not mind honouring that- however if you are happy fir another expert to assist then thats is not a problem Thanks Sam

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