NRCGT - Qualify for PPR before home sale by 90 day test

[boxley]

Hello

As the government information online is unclear for NRCGT on UK residential property (links going to unhelpful places), perhaps someone would be kind enough to confirm the rules on qualifying for PRR?

I left the UK and have been non-res since well before 2015 (not for reasons of employment).
I bought my UK home in 2000 and lived in it for some years before 2015. It has since been let out. I have no other UK property.
My tenants have just said they're leaving, and due to personal circumstances I'm now in a position to start spending more time in the UK (during my kids' school holidays, which means around 100 days per year).

Decision - do I sell now and buy a property that's more convenient, or wait?

If I sell now, I pay CGT on gains (using using favourable method) accrued since Apr 2015. However, if I spend 90 nights in the property (spread over school holidays) during 2019-2020 and then sell after April 2020, I can claim PPR which means I get relief for the last 18 months, plus lettings relief. I calculate this should save me at least £15K in CGT.

I have noted that so long as I don't work too much during the 90 days in the UK, I can avoid becoming resident in the UK for tax purposes for the year in which I wish to sell.

Is this correct, that the 90 days in the UK will have the double benefit of both spending time in the UK(!) and reducing my CGT?

[maths]

As the property was at one time your sole/main residence (even if pre 6 April 2015) you already qualify for relief relative to the last 18 months of ownership.

[AGoodman]

You can't claim PPRR for a period when a property in question is not your main home (in any country).

If your actual main home is in Spain then spending 90 days in your UK property will not help you.

It may work if you do not own any other properties but instead rent your Spanish property, or you change your Spanish property and are in a position to make an election.

[boxley]

I lived in my property in 2010. I have not lived in it since, and it has been let for the entire period, pretty much. On that basis, should I be claiming PPR anyway, which gives me the 18 months and the letting relief, even without having spent 90 days in any tax year in the property since then?

No, I don't live in rented accommodation in Spain. I live on a floor of my mother in law's building in Egypt. I am obliged to live here to care for my children as they are at school here. I have lived here year round for many years but have no rights to the property. I keep any special, personal items in the UK, since I could be thrown out at a moment's notice.

[boxley]

I just spoke to the tax office. They confirmed that I am entitled to the last 18 months and lettings relief, even without having lived there 90 days since 2015. Also, there is no confusion about which is your home, if you only have one in the UK. If you spend 90 days there in any tax year, you get the CGT relief for that year.

Thanks for your posts - they helped me work out the solution for my situation.

[maths]

I am not sure HMRC are entirely correct.

As my post stated, any capital gain attributable to the last 18 months of ownership is exempt from CGT. As the property was also at sometime your sole/main residence then lettings relief also applies.

However, the fact that you may own only a single property in the UK and assuming non-UK residency you did spend at least 90 days in the property each tax year does not in my view necessarily make the property your sole/main residence for CGT purposes.

Before examining whether the 90 day test is satisfied in any tax year it is necessary to first ascertain whether the property qualifies as a sole or main residence under the normal tests (e.g. quality of residence etc). If it does not, then even occupying for 90 days does not turn automatically the property into a residence.

In your case you have not lived in the property for some years during which it has been let out. A sale now without re-occupation would I suggest not be a sale of your sole/main residence. However, taking the last 18 months plus lettings relief it may be that any CGT charge will not be significant (depends on market values).