PPR query

[JOHNRE]

My wife owns an apartment in Manchester and, from 2014-2016 our son lived there as his main /only residence. She is considering leaving the property to him in her will. I have been thinking about possible PPR relief if this was to happen (he now works overseas so would be unlikely to live there again straight away). Does the fact that, for 2 years, the apartment was his residence qualify him for PPR when he sells or does one have to actually be the "owner" at the time of residence?

Would appreciate viewpoints or signposting to the relevant regulations....many thanks. John

[AdamS93]

He doesn't own it.

If sold now, the chargeable gain will be taxable on your wife.

When your wife dies (sorry but straight to the point) the probate value (value in your wife's death estate) will become the new base cost for Capital gains tax for whoever inherits the property. Therefore, if your son sold it on the same day he inherits the property, there will be no capital gains tax payable.

If your wife gifts the property to your son before death, there will be capital gains tax payable and no PPR available for your wife.

I don't think you have quite understood the concept of PPR, so probably best if you see an accountant to discus your concerns.

[JOHNRE]

Thanks for your prompt reply. Perhaps I should be a little clearer.....assuming my wife dies and he inherits the property at the probate value......because he intends to work abroad for the foreseeable future he would look to rent out the apartment......if he were then to sell at a much later date, would he be able claim PPR and Lettings Relief because the apartment was his main residence from 2014-16? Or, would he have to move back to the apartment for a period of time after he has inherited to ensure that this could happen?

[AdamS93]

He would have to move back in to the property.

TCGA 1992 s.222(1)(a) - 'a dwelling house or part of a dwelling house which is, or at any time in his period of ownership been, his only or main residence.'

He hasn't occupied the property as his main residence whilst he has owned it.

[JOHNRE]

Thanks for the link, that clears things up. Many thanks for your time.

John

[JOHNRE]

Actually, one final query.....if he were to rent it out before he lives in it as his main residence would he be able to claim letting someone relief, for that period, when he finally sells (assuming that he does actually live there for a period after the lets)? I am assuming that the lets would need to be after he has lived there......again, if you have a link that would be very useful.

John

[JOHNRE]

Actually, one final query.....if he were to rent it out before he lives in it as his main residence would he be able to claim letting relief, for that period, when he finally sells (assuming that he does actually live there for a period after the lets)? I am assuming that the lets would need to be after he has lived there......again, if you have a link that would be very useful.

John

[maths]

I am assuming that the lets would need to be after he has lived there......again,

No, not necessary.

The lettings can be before or after the property has qualified as his sole/main residence.

[JOHNRE]

Many thanks for the replies.