Can I make a BTL I've owned for 10 years my ppr now

[Cloisters]

Hi,

I am thinking of downsizing and one of my rented properties would be ideal - I don't really want to sell the family home as it is a great investment (lived in 22 years) so am considering moving to the smaller property and declaring it as my ppr and perhaps living there two or more years before then moving away completely. There is a very small chance I could move back to the family home but assume not.

I read I only have two years to move my ppr from when "the combination of properties" changes? I have owned the BTL for about 10 years and only rented it to date.

Can I do what I've suggested please and benefit from the CGT releif on the new home (renting the family home should be proof hopefully).

P.S. Thanks for those who responded to a similar question earlier, it is helping to focus my mind.

[maths]

If you live lock stock and barrel in the ex buy to let then on sale no CGT charge should arise.

You cannot declare the ex buy to let is your new residence if you leave your former residence as you will not have two residences at the same time.

If you live in both then you will need to nominate which is your main residence.

[bd6759]

If you live lock stock and barrel in the ex buy to let then on sale no CGT charge should arise.

He has owned it for ten years, so there is likely to be a CGT charge when he sells it, subject to some residence and letting relief..

[maths]

Bd6759 is correct. Overlooked the 10 year BTL period.

[Cloisters]

Thanks for the prompt and clear answers. Very helpful.

[Cloisters]

Another question on this thread please.

If I move to the current BTL as my new ppr (and let the current family home out) and then sell the old BTL (I'm then living in) after more than a year as my PPR, will I get the additional 18 month allowance in addition to the time I lived there?

The gov website states "the last 18 months", so if this was concurrent with my occupation of the property it may not be additional which makes the calculation less favourable as the lettings relief for both myself and my wife is based on this too.

In the same vein, the lettings relief up to £40k per person - would this be allowed even though it was let before I moved in and not after?

Is there any way I can be sure of the outcome before I decide to move as it all seems as if I only find out after the event if it was a good idea financially?

Thanks,

[AGoodman]

No, you are effectively guaranteed relief for the final 18 months (provided it is your main home at some point). The two are concurrent if your occupation is also within the last 18 months.

Lettings relief appears to be fine provided you live there at some point.

No, there is no way to be sure but the rules are pretty clear. You face two problems:

(a) The principal home must be occupied with a degree of permanence. If HMRC think you have only moved in temporarily to claim the PPR on sale then they could refuse your claim. This is lessened if you let the other home, and inform everybody of your new address (as well as actually living there) you should be fine but if you are moving in with a view to selling in 9-12 months time (and actually do so) they could be difficult.

(b) Under s.224(3), the relief does not apply if the acquisition of the house was made wholly or partly for the purpose of realising a gain from the disposal of it. This should be fine if you have owned the BTL for a while as HMRC have said that they will only apply this provision where it appears the primary purpose of the purchase was an early disposal at a profit - principally buying properties to "do up" or convert and sell on.

[bd6759]

If you move into the house solely for the purpose of obtaining PPR relief, you will not get PPR relief. PPR relief derives solely from the property being your residence, which means more than simply living it for a period in order to get the relief.