PPR

[cart]

A buyer bought a second home and within the 2 year period allowed he opted for his new property to be his elected primary home.

In due course he sold his new primary home and moved back into his original home. He thereby now has only one property. How long would he have to reside in what had become his elected secondary home before it would once again be classed as his primary home.

[mullet]

PRR is about quality of occupation - there is no specific period of time. Please provide some more information ...

How far apart are the properties?
Is the person married?
Are there any children - what about schools?
How long was the second property owned for?
How do the properties compare - e.g. flat, house, size etc?
Was the second property only ever used by the person, or has it been let?

[Incredulum]

Please also provide dates of acquisition and disposal and moving and electing.

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Thank you Mullet and Incredulum

Properties 2 miles apart
Married couple
Adult children not living at home
Lived in elected PPR for only 4 months
Initial PPR was a house
Elected PPR was a flat
Only the couple ever lived in either property

The motivation was to downsize to a flat and let the house.
Flat living was disapointing after house living, and the house proved difficult to let.
We realised the move had been a mistake so sold the flat (our elected PPR) at a small profit and moved back into our original PPR (elected second home). We now have only one property.

Are you saying we will never be allowed to have a PPR again because of what we did, irrespective of how long we live in what was our elected second home?

[mullet]

Are you saying we will never be allowed to have a PPR again because of what we did, irrespective of how long we live in what was our elected second home?

Not at all, but I think that you have over-complicated what might be a very simple situation.

Residence is based on simple fact. If you moved out of house to flat, with the intention of flat being your permanent home, then house ceased to be your residence at that point. If you have not had two concurrent residences, then a nomination is neither possible nor relevant. If the flat can be treated as your true residence and thus attract PRR, the small gain will be exempt. That will "cost you" four months of PRR on the house. The absence rules cannot apply in your case, since there must be no "qualifying for PRR" property during such a period of absence. So when you sell the house you will need to calculate the gain on a time apportioned basis allowing for those four months (unless you sell within 3 years of that time), but any gain arising may well be covered by your two annual exempt amounts (currently £10,600 each). It depends on when you sell and how much the gain is.

If the flat did not qualify as your residence (this might be the best option, i.e. not to even argue the point and to "realise" that your nomination was invalid), then would the "small gain" be covered by two annual exempt amounts (if not already used against other capital gains)? If so, then the house would qualify as your PRR without a break, on the basis that the following would apply in the negative: "“period of absence” means a period during which the dwelling-house or the part of the dwelling-house was not the individual’s only or main residence and throughout which he had no residence or main residence eligible for relief under this section".

[Incredulum]

Please also provide dates of acquisition and disposal and moving and electing.

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