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Where Taxpayers and Advisers Meet

Principal Private Residence Relief

David Lyon
Posts:19
Joined:Wed Dec 17, 2014 10:59 am
Principal Private Residence Relief

Postby David Lyon » Wed Jul 19, 2017 5:09 pm

My client has been working abroad as a non-resident for many years. However, he bought a house in the UK in 2003 which he has lived in on all visits back to the UK and where all his correspondence is sent. He lets his parents live there rent-free but regards this as his main home. His property abroad comes with the employment and he rents it.

He will be resuming UK residence after 6 April 2018 and will live in another property with his family from then on. If he sells the first property after resuming UK residence, will he qualify for principal private residence relief as it has been his only main residence from time of purchase.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Principal Private Residence Relief

Postby bd6759 » Thu Jul 20, 2017 11:32 am

It doesn't sound like it has been his main residence. His main residence is abroad.

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Principal Private Residence Relief

Postby maths » Thu Jul 20, 2017 7:03 pm

Not perhaps straight forward.

I think that it could be successfully argued that the UK property is a main/sole residence. Much will depend upon the facts.

I think, however, that on his return to the UK following termination of his work abroad if he and his family do not occupy the property this might significantly weaken any argument that the property constitutes a main/sole residence. It might indicate that he/family never really had any intention to occupy it.

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: Principal Private Residence Relief

Postby darthblingbling » Thu Aug 03, 2017 11:33 am

PPR is vague, but there must be intent that the property is to be used as the main residence. As such there is no set amount of time in which you can move back into a property to claim it as your main residence. If he is letting someone else live there then arguably it could not be considered his home.

If possible he may find it beneficial to sell while a non resident as he would only need to consider the gain after the 5th April 2015. However, depending on where he is tax resident, he may have a larger liability there. I'd advise he get some proper tax planning done.

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Principal Private Residence Relief

Postby SteLacca » Fri Aug 04, 2017 3:38 pm

You also need to reconsider his residence status if he has claimed to be non-resident. If he stayed in the property for more than 91 days in a year then he may be tax resident in the UK.


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