PPR Relief On Overseas Home

[Troisboules]

BACKGROUND
My wife and I bought a property in France 13 years ago with the intention of retiring to France. We were not free to move immediately because of family commitments in the UK, so it was initially used as a holiday home for 8 years. We finally moved to France formally in 2012 and the property has been our principle residence for the past 5 years.

Throughout this period we continued to own the UK property that had been our principle residence for more than 10 years before we moved to France. We have not rented this UK property during our years in France and have only used it ourselves consistent with staying no-resident under the Statutory Residence Test.

We are now trying to sell the French property because health problems have forced us to abandon the French retirement dream and move back to the UK.

Ideally we will sell the French property before we become UK resident again. But the health issues may force us to move before the sale. And then there’s Brexit!

So we may have no choice but to accept that we may be UK tax resident again when the French property sells. So……..

QUESTIONS

Am I correct that an overseas property can qualify for Principle Private Residence relief against UK CGT, where it genuinely has been our home for this period?

If PPR is granted, would it apply to the whole gain, or would we still need to apportion the gain between the 5 years it was our home and the 8 years it was a secondary residence?

If any gain is taxable, would we still be able to claim the cost of renovations and improvements against the gain? The property was virtually uninhabitable when we bought it and it’s now quite an elegant villa. We have done most of the work ourselves, but we do have some bills from contractors, and lots of bills for materials, equipment, fixtures and fittings.

Any advice on this would be much appreciated.

[pawncob]

Yes
Yes apportioned.
Yes.

[Troisboules]

Many thanks for your fast response. That's very helpful.