selling 2 'principal residences'

[zenroom]

I own a house in London which I have lived in as my PPR for 7 years.

I am about to buy a secod-home in Brighton (not a buy to let).

Will I be liable for CGT when I sell one or the other, and are there any legitimate ways to avoid/reduce it?

Skimming HMRC it seems that if I were to now declare the Brighton home as my PPR it may be best. If I sold the London house within 3 years it would still be exempt for everything up till today, and for the next 3 yrs (final 36 months exemption), and if I sold the Brighton within 3 yrs it would also be exempt (final 36 months of a house that has been by PPR at some point).

So AFTER 3 years if I sold either, the CGT would only cover the period when whichever property was NOT my PPR?

Am I close..?

[Peter D]

Yes you are correct if you buy the house in Brighton and move out of the London property you have 36 months exemption for any CGT liability on the property. However you say second home are you going to live full time lock stockand barrel in the Brighton house as your home or just spend the weekends there. You can not have two PPR's If after leaving the London house you have up to two years to Nominate which house is your home but and you wich to keep as your PPR. Yes if you lived in the Brighton house for three years or infact one year will qualify for PPR, and sold both house there would be no PPR. Why would you want to leave a house empty in London for 3 yeras, surely as you have moved out you would rent it out perhaps for more than 3 yeras as you would also qualify for Letting Releif at up to £40,000 which could wipe out any CGT for say 5 or 6 years. You must live lcok stock and barrel in a house to qualify for PPR and I'm not sure that is your intention, tell us more. Regards Peter

[zenroom]

You are right it would be mainly weekends, holidays and sometimes working there during the week. The London house wouldn't be empty as I would be here during the week a lot of the time and some weekends.

I thought from reading the guidance on the HMRC that owning two homes both of which I live in, I can simply 'nominate' which is my PPR?

Alternatively... If I sold my London house in 2-3 years time (with CGT exemption as its my PPR) and then my Brighton house became my PPR (with probably a rented room in London as well), would this then also be exempt from CGT if I sold Brighton later... Assume there would be a minimum time I would need to live there for first?

I am really unsure whether I will be keeping either/both properties for more than a few years so am keen to know the tax implicatoons of all the options!

[Peter D]

Your can only have ONE PPR, Brighton will not be your home, it is as I thought a second home. This property will attract Capital gains on the increase in the property value over time. Your London property will remain your PPR for as many years as you wish unless you rent it out and that is when the 36 months exemption starts. There are Nominations that allow someone to move to a different house for a eyar or 2 due to work and effectively take there PPR status with them then returning home and moving the nomination back but these cases are looked into very eagerly by HMRC and your situation in my book does not qualify. We would all have two PPR's if we could. Regards Peter

[zenroom]

Ok I think I get that - the HMRC doc implied you could simply 'nominate' which of your 2 homes was the principal one. Your saying it actually depends on where you spend most of the time is that right?

I am self-employed so if I decided to work from Brighton a lot more then it might be legitimate to say I had switched my primary residence (with London losing PPR status as it then became a secondary residence), but not while it is a weekend home?

[Peter D]

You can 'nominate' but they check to find out whether it is really your home for the majority of the week. This is sometimes used when a person moves away say for 18 months to a different part of the country due to work, buys and nominates then after 18 months nominates back again avoiding a CGT bill on the property that he needed to meet the work requirement, so it does happen although closely challenged by HMRC. He returns to his own house and sells his "Second Home", I have heard of a few of these types or arrangements being rejected recently due to tightening of CGT avoidance. Regards Peter

[zenroom]

Ok makes sense now I think!

What happens if I sell my London property in the next year or so, but keep the Brighton one for a few more years, possibly buying again in London a year or 2 later but possibly not (not sure whether I will make a more permanent move to Brighton but it is a possibility)?

[Peter D]

If you keep your Brighton house and sell your London PPR within 3 years there is no CGT, then at that date your Brighton house which I assume you will be living in is your true PPR and if you have lived there for more than 6 to 9 months then it will become your PPR with the same exemptions should you come to sell it and move back to London. Regards Peter

[CDavey9501@aol.com]

Peter is wrong. You can nominate the Brighton House as your main residence even if it is not in fact the one that you live in most of the time. It is only when you do not nominate that the matter is decided on the facts of which actually was your main residence (if that makes sense).

[Peter D]

I agree the OP can even wait just less that 2 years then nominate the Brighton House and the PPR status will move with the nomination. Should be decide to sell the London property he can move the nomination back as long as not more that wto years has past since the last nomination, that is why I suggest leaving the nomination until say month 22. If the OP exceeded 2 years he can not nominate unless he has a change of property circumstance, like buying another house, so a little car is require. Regards CG 64485 thru CG 64495. Regards Peter