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Good Afternoon,
Bit presumptuous here, however will give it a shot as I will personally be impacted by this type of Relief, however will also serve to help me fully understand the concept for my exam.
Having lived in the UAE for 14 years due to employment I had a single residential property which was the family home until we left. During the period away we rented the property on a year by year basis to secure rental income which was taxed.
I have since returned to UK and purchased a new property which has now become the family residence and I am considering selling the previous property.
Would this still be counted as qualifying for PPR Relief with deemed occupation for the 14 years away? I didn’t return to the property but that is irrelevant under the deemed occupation rules.
I guess I’m being a wee bit cheeky here but inevitably killing 2 birds with 1 stone (personal and study). My guess is that renting it out may void the claim however nothing in the notes provides any clarification on this. 🙂
Regards
CraigAll that said maybe the word ‘Private’ is the giveaway and voids the relief in my situation
I have just noticed the Letting Relief however still unclear to my original question as point a) says owner is absent but not covered by deemed occupation rules and rents it, whereas I would be working abroad (deemed occupation) and rented?
You need to be very careful and take specific advice before you sell as given the period involved I imagine a substantial gain may arise on a future sale – you have 2 main problems from what you have said:
1) From the time you acquired the 2nd property you have 2 years to tell HMRC which is to be your PPR and – most importantly
2) The deemed occupation for any period of time for working overseas will not apply unless you do resume occupation again! The concession of not having to occupy after a period of work overseas only applies if you are prevented from returning to the property by reason of that work ie you are still working overseas – you are not still working overseas!
Do not sell until you have spoken to a solicitor – you may well need to occupy your old property again prior to sale to secure the 14 years as deemed occupationGot it thanks, In hindsight probably would be chancing my arm as have no intention of moving back in.
Will consider most allowable tax efficient way which will be either to split with wife and enjoy the AEA x 2 or it may even work out more beneficial to transfer fully to my wife. Will do the sums and decide thereafter.
Thanks for clarification I obviously overlooked the ‘must reoccupy’ part of the rules that you have clearly stated in the OT study guide.
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