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Where Taxpayers and Advisers Meet

C G T - Buy to Let relief

Kiran
Posts:19
Joined:Wed Aug 06, 2008 3:38 pm
C G T - Buy to Let relief

Postby Kiran » Wed Nov 23, 2016 8:24 pm

B T L property final 18 months’ and s223 relief

I would appreciate your guidance. Clarification needed regarding the final 18 months (was 36 months for the disposal before 5.4.16) & regarding 3 years’ deemed occupation.

My son bough his 1st house in January 2007 and he occupied it for initial 3 months. Then it was let since April 2007 till March 2016. Then my son occupied it from 1.4.16 till 18.11.16 when it was sold with considerable Capital gain.

My son is eligible for the relief for the initial 3 months as he was living there and he is due a relief for the final 18 months. He moved in the property when the tenants left from 1.4.16 thus occupied the property for the final 7.5 months. This actual occupation for 7.5 months is covered within the final 18 month’s relief or is the 18 month’s relief allowed on top of the actual occupation at the end of the ownership?

Also can my son claim relief for the "three years’ absence from the property for any reason" (s 223 (3) (a))? Although he was living with us when the property was let.

Secondary question is about Let relief: which is going to be the lower of 3 criteria, the relief about “occupation”. Is this, again, for 3 months plus 7.5 months (for actual time he lived in) or for 3 months plus final 18 months plus the deemed 36 months (if that is allowed) ?

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

Re: C G T - Buy to Let relief

Postby maths » Wed Nov 23, 2016 8:33 pm

It seems by no means certain that he will be able to claim private residence relief at all.

Whilst length of time of occupation is not the deciding factor he appears to have occupied it for a 3 month then a 7 month period but let it out for 9 years.

It seems arguable by HMRC that he bought; moved in for just 3 months; let out and moved back in for 7 months prior to selling. In other words it never qualified as his sole or main residence.

Crossleys
Posts:40
Joined:Tue Sep 28, 2010 12:23 am
Location:Hindhead, Surrey
Contact:

Re: C G T - Buy to Let relief

Postby Crossleys » Fri Nov 25, 2016 7:51 pm

Three months is not necessarily too short a period for establishing private residence relief. If the son bought the property with the genuine intention of making it his main residence, and then circumstances changed, causing him to move, then it is possible that PRR is claimable. The legislation does not specify a period of time for which the property has to be occupied, the reason for the original purchase is all important.
PNP Lewin FCCA
Crossleys Chartered Certified Accountants
plewin@crossleysuk.com

Kiran
Posts:19
Joined:Wed Aug 06, 2008 3:38 pm

Re: C G T - Buy to Let relief

Postby Kiran » Fri Nov 25, 2016 8:53 pm

Thank you for your reply Crossleys. After 1st response i have checked with "paid advice" and also with HMRC. Relief is allowed for the initial months (no matter how short) and also for final 18 months (7 months stay is covered within the 18 months.

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

Re: C G T - Buy to Let relief

Postby maths » Fri Nov 25, 2016 9:32 pm

Any determination is a factual one. There is insufficient information in the posting to provide a definitive view.

It is not possible to obtain a view from HMRC on the matter over the phone which is worth anything and cannot be relief upon.

Bottom line is whether you can adduce sufficient evidence to support your stance.


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