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Where Taxpayers and Advisers Meet

PPR extended relief

Incredulum
Posts: 2723
Joined: Thu Dec 03, 2009 5:35 pm

Re: PPR extended relief

Postby Incredulum » Tue Nov 08, 2011 1:48 pm

Would it be possible for them to elect for the flat that has been sold to be their PPR for a period after the tenant moved out? I know it is possible to amke the election after sale but would it be regarded as a 'residence' of theirs. it was the husband's residence in
the past but stood empty between the tenant moving out and the sale.
That sounds like a pretty poor quality of "residence" to me then. No furniture; never occupied etc. etc.

http://www.hmrc.gov.uk/manuals/cgmanual/cg64435.htm

Incredulum
Posts: 2723
Joined: Thu Dec 03, 2009 5:35 pm

Re: PPR extended relief

Postby Incredulum » Tue Nov 08, 2011 1:57 pm

A bit like this example where the temporary nature of the use of residence suggests a better view (than the article) that PPR relief probably does not apply. http://www.telegraph.co.uk/property/752 ... arket.html

And unlike this one, where the (apparently) permanent nature of the year's residence suggests that in fact quite probably (although the article does not suggest it) there are in fact PPR and letting reliefs due. http://www.telegraph.co.uk/lifestyle/81 ... xpert.html


Always used to be good for a laugh on a Saturday morning.

Brightonian
Posts: 99
Joined: Wed Aug 06, 2008 3:31 pm

Re: PPR extended relief

Postby Brightonian » Tue Nov 08, 2011 2:40 pm

I'm glad Incredulum is enjoying a good laugh. I'm afraid I'm not. And I don't thimnk it's very fair to gloat.
Date of marriage was Feb 2008 so my only hope is arguing that W was holding the property on trust for H or that the gift was a sham.
Thanks to those who have taken my enquiry seriously and tried to help.

Incredulum
Posts: 2723
Joined: Thu Dec 03, 2009 5:35 pm

Re: PPR extended relief

Postby Incredulum » Tue Nov 08, 2011 2:53 pm

Gloating? I'm sorry if you think that; I just think you're out of your depth and have plenty of form. It's nice to be able to point out to you directly that you have previously made me spit my cornflakes out in incredulity.
Date of marriage was Feb 2008 so my only hope is arguing that W was holding the property on trust for H or that the gift was a sham.
I suggest a good read of s99 TMA 1970 before following either of those approaches, quite apart from considering the appropriate level of penalties for such a disclosure, and indeed whether your client would be perjuring himself if this were to end up in court.

Brightonian
Posts: 99
Joined: Wed Aug 06, 2008 3:31 pm

Re: PPR extended relief

Postby Brightonian » Tue Nov 08, 2011 3:04 pm

I am not proposing anything dishonest. I'm shocked that you think that. I will take advice on whether the facts of the case would support such a view. And I would certainly not risk my livelihood for something that the PI insurers will pay.

you may feel you're not gloating but there's a definite whiff of 'kicking when down' about your posts.

maths
Posts: 7600
Joined: Wed Aug 06, 2008 3:25 pm

Re: PPR extended relief

Postby maths » Tue Nov 08, 2011 3:56 pm

The gift in March 2010 either occurred or it did not; assuming it was effected in the manner which I suspect you intended then beneficial interest would have, in part, been transferred at that time from H to W. The eventual sale was then by both H and W and not just H.

A married couple can only have one residence which qualifies for PPR relief for any particular period of time. However, for an election to be valid there has to be two residences for the same period of time in respect of which an election in favour of one of them can then be made. It appears that at no point in the 2 years prior to sale was the flat a residence; hence no election possible.

Whilst not wishing to get dragged in to the exchange between you and “incredulum” if one holds oneself out as knowledgeable in a particular profession then one is exposed to “attack” if suspect advice is given. The following is an extract regarding your expertise (assuming of course I have got the right Maggie Fleming):

“Maggie Fleming is an associate of the Chartered Institute of Taxation and is an associate of the Personal Finance Society (APFS). She is a fully qualified STEP (Society of Trust and Estate Practitioners) practitioner and is an experienced and highly-qualified Independent Financial Adviser (IFA). At Isis Financial Planners she specialises in providing tax and trusts advice to our clients.
After 11 years as a specialist at Arthur Andersen ……
She is a well-known figure in Brighton and writes for the Daily Telegraph, as well as various professional journals and has also spoken many times on local radio, as well as on Radio 4's MoneyBox Live….
In mid-2005, Maggie was appointed to the highly prestigious Personal Taxes Sub-Committee of the Technical Committee of the Chartered Institute of Taxation. She currently serves on the CGT & Investment Income sub-committee.
In 2005, she took part in a CIOT-sponsored debate on taxation alongside Vince Cable”.


I attempted in my initial response to proffer helpful advice (and hopefully accurate advice) but within 17 minutes you resolutely disagreed without, if I may say, taking any serious time to re-read the legislation in the light of a comment which was made which was different from your own view.

I would add, however, that I believe many tax practitioners and financial advisors are not aware of what I believe is a subtle point and to this extent I do not think (if i may say) you have made some major faux pas or deserve pilloring; unfortunately, however, very few clients have sympathy with professionals who try their best but get it wrong (qua Conrad Murray).

For my part, I always think there by the grace of God go I.

Brightonian
Posts: 99
Joined: Wed Aug 06, 2008 3:31 pm

Re: PPR extended relief

Postby Brightonian » Tue Nov 08, 2011 4:06 pm

Thank you, Maths. You have been very helpful and I apologise for my initial hasty response. I agree about 'there but for the grace of God' - I've been in tax long enough (27 years) to know that it is very easy to slip up.

Incredulum
Posts: 2723
Joined: Thu Dec 03, 2009 5:35 pm

Re: PPR extended relief

Postby Incredulum » Tue Nov 08, 2011 6:05 pm

Either beneficial interest was not transferred:
arguing that W was holding the property on trust for H or that the gift was a sham.
Or it was:
The small rental income for 2010/11 will be shown on both their 2011 tax returns.
I am not proposing anything dishonest. I'm shocked that you think that.
I have been shocked by the advice you have written in the Telegraph (see links above), so why don't we call it quits.

mullet
Posts: 3242
Joined: Fri Nov 06, 2009 9:26 am

Re: PPR extended relief

Postby mullet » Tue Nov 08, 2011 9:09 pm

Personally, I am quite concerned by
Would it be possible for them to elect for the flat that has been sold to be their PPR for a period after the tenant moved out? I know it is possible to amke the election after sale but would it be regarded as a 'residence' of theirs. it was the husband's residence in the past but stood empty between the tenant moving out and the sale.
as I find such a notion quite "creative". But, saying that, I once attended a capital taxes planning seminar with an "eminent" speaker. He suggested that owners of BTL properties submit a main residence election in favour of said BTL within 2 years of acquisition. I challenged him on the basis of said BTL not being the owner's residence, and he would not accept that an election was not in point. So I can understand why tax professionals might think in this way and forget that occupation as a residence is a prerequisite of an election being possible.

Brightonian
Posts: 99
Joined: Wed Aug 06, 2008 3:31 pm

Re: PPR extended relief

Postby Brightonian » Tue Nov 08, 2011 9:23 pm

I think I have been misunderstood. I was not proposing anything dodgy simply asking for opinions. An election can be backdated. If done within the proper time limits, it can be effective if the property elected is regarded as a 'residence'. I was simply asking if the property could be regarded as a residence of the couple on the grounds that it had previously been a residence. I was clutching at straws and see now that that was not possible and in any case the couple married just over 3 years ago so such an election would not be possible even if the property were a residence. I have asked the client for documentation of the transfer and am getting evasive answers which are making me think that possibly they neglected to transfer the property after all! I am praying to the god of tax advisers. . . . .


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