How often do we see this?
House bought in 2001 for 100k and became PPR. In 2007 it was worth 2m at the peak of the market, and let out. In 2012 it is sold for 1.1m. These numbers are perfectly possible in some parts of inner London. CGT is payable on 250k, yet the property has lost money whilst it has been a BTL.
TCGA 224(2) allows for an adjustment in a just and reasonable manner for the purposes of s223 (PPR) relief if "at any time in the period of ownership there is a change in what is occupied as the individula's residence... for any other purpose.
Applying this on a just and reasonable basis, the 900k loss during the period of letting is split 50% (last three years) as PPR relief - so not an allowable loss - and 50% an allowable loss. CGT payable - nil.
Anybody have any experience of applying this?
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