Definition of PPR for GCT purposes?

In order to define a property as your principal private residence so as to avoid CGT, do you actually have to live in it if you own no other property?

To put this in perspective, I know someone who lives in accommodation provided by his employer and has no property of his own. If he were to buy a property - initially as a holiday cottage, but ultimately to retire to - could he declare this to be his PPR from the outset?

Reply to
Roger Mills
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Possibly.

Although there is, I understand, a concession which allows you to retain PPR status of a home you had to move out of when your job required you to move into tied accommodation, I don't think this concession extends to property acquired after the event.

It is possible to have *two* residences and declare one of them to be your PPR even though in fact you mostly live elsewhere. But you would actually need to establish a proper "I live here" presence. And it would you could not rent it out, since that would be incompativle with you living there.

If the intention is to retire to it permanently, it doesn't of course matter at all, since if you never sell it, you never pay CGT.

Reply to
Ronald Raygun

Thanks - that's useful.

Could you please elaborate a little about establishing an "I live here" presence?

I suspect that he would want the option of using the equity from this (as yet, hypothetical) property to buy a different property to retire to - so CGT *could* be an issue.

Reply to
Roger Mills

Whether a property is your PPR is -informally- just "where you live". In particular, you do not necessarily have to own your PPR; you might be renting it. Furthermore a property which you do happen to own cannot automatically be considered to be your PPR simply because it is the only property you own; it could be let to tenants or rented to holidaymakers or it could simply be lying fallow.

But if you own several properties and all (or several) of them are your residences (in the sense that you live in more than one of them) then the question of which of them is your *principal* PR is not always simply one of fact but can be one of choice. You can decide which one of them you want to treat as the principal even if it is not the one you live in most of the time.

But before a property can be nominated as your principal PR it has first necessarily to be (one of) your private residence(s), and whether a property is your PR *is* one of fact, albeit a fact which is not always straightforward to determine. You must live there at least some of the time, and as such it must be *capable* of being lived in by you. That means that it must be suitably furnished and be available for your occupation when you want it. That means that if you rent it out (other than just part of it on a lodger basis) it can't be your home during those periods.

Indeed.

I've just re-read the relevant part in leaflet IR283 and cannot find any hint of confirmation of the suspicioun I expressed earlier, namely:

--quoting myself Although there is, I understand, a concession which allows you to retain PPR status of a home you had to move out of when your job required you to move into tied accommodation, I don't think this concession extends to property acquired after the event.

--unquote

Instead, "intention to occupy" seems to be the key:

--quoting from ir283: If you live in accommodation that is job-related and you also own a dwelling-house that you intend to occupy as your only or main residence, the dwelling-house you intend to occupy is treated as actually being occupied by you as a residence during the period in which you have the intention to occupy it, even if you never actually live there. This means that you may nominate that residence as your only or main residence and get relief on the whole or a part of the gain.

--unquote

This suggests that your friend would be OK even if he acquires the property while already living at the boarding school where he teaches (or whatever) and even if he rents it out.

Reply to
Ronald Raygun

That's extremely helpful - many thanks!

Reply to
Roger Mills

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