Capital loss on sale of former overseas PPR

[Chaddesley]

If an individual sells an overseas property that he had lived in previously but had moved out of when he relocated to the UK (a number of years ago) for a considerable loss would that loss be eligible to be set against capital gains from the sale of other assets (shares) and if so would the loss need to be adjusted in any way for the fact that he had previously lived in it (a sort of reverse PPR)?

Any thoughts appreciated.

[mullet]

Interesting question. Section 222 onwards applies to gains - expressly stated in each section's introduction. But the over-riding provision is Section 16 which deals with losses:

(1)Subject to section 72 of the [1991 c. 31.] Finance Act 1991 and except as otherwise expressly provided, the amount of a loss accruing on a disposal of an asset shall be computed in the same way as the amount of a gain accruing on a disposal is computed.
(2)Except as otherwise expressly provided, all the provisions of this Act which distinguish gains which are chargeable gains from those which are not, or which make part of a gain a chargeable gain, and part not, shall apply also to distinguish losses which are allowable losses from those which are not, and to make part of a loss an allowable loss, and part not; and references in this Act to an allowable loss shall be construed accordingly.

So I think the answer is that you calculate the loss as normal, and then restrict it using Section 223 time apportionment. What about the final 36 months? Treated as residence to produce a greater restriction methinks.

It's Friday, so I'm happy to be wrong. But all this looks logical.

[pawncob]

The gain should be time apportioned.
Exempt period will include the 3 years following vacation of property.

It's possible HMRC would claim that there's a period wholly exempt due to your moving to the UK for work purposes and therefor unable to occupy the property.(Up to 4 years)