CGT on a property that was PPR and then let out

[lfrier]

Client purchased a council house that was his PPR for 4 years. Lived in for 3 months and then moved out. Rented out for 3 years prior to sale.

Could you confirm that the client pays no CGT under the 336 months PPR rule IR283 then he is also entitled to Letting Relied of up to £40,000 ( the Lessor ).

How do I show all of this in a computation?

Thank you with anticipation!

LAF

[Lee Young]

If the house was sold within 3 years of his moving out of it then there is no taxable gain and lettings relief will not even be in point.

Zero tax liability.

I assume your reference to 4 years was for the period prior to when he actually owned it?

[al_eebee]

Any thoughts as to whether TCGA 224(3) might bite him bearing in minf he only owned and lived in the property for 3 months before renting?

What was the reason for the move after 3 months.

Certainly go for a PPR claim but be aware that challenge is a possibility.

[lfrier]

He lived in the property (as a council house) for 4 years prior to purchase.

He relocated due to a business opportunity after three months but kept the property in case it did not work out so he could go back to his home town.

What happens if he rented the property out for say 3 years two months prior to sale?

[al_eebee]

I am not so sure that the 4 years rented have any relevance to the matter.

Without your follow up as to the reason for the move, which I would say gives a valid reason for the move and retention of the property so that 224(3) fades away, one could as easily say that the client knew he was about to move away but saw an opportunity to make a profit by buying up the council property and keeping it on to take the profit.