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Hi,
Deemed occupation,
(1) up to 3 years of absence for any reason,
(2) any period spent employed abroad
(3) up to 4 years of absence while working elsewhere in the UK.What I need to know is, that does period (1) and (3) of deemed occupation must be preceded and followed by a period of actual occupation?
And what does the book mean when it says condition to reoccupy after period of absence does not need to be satisfied for period (2) and (3)? How is actual occupation different from reoccupying in this particular scenario?
Thank you,
God bless.For any of the periods of deemed occupation to apply the taxpayer must have occupied the property at “some time” prior to leaving, not necessarily immediately before one of the deemed occupation periods – so if the taxpayer buys the property and immediately lives in it then this condition will have been satisfied for any and all subsequent times the taxpayer may leave the property.
If the taxpayer does not then return to the property prior to disposal they will not be entitled to the 3 years for any reason ( (1) above), but if the reason they do not return is that they are in that employment overseas or elsewhere in the UK they will still get the periods of deemed occupation in (2) and (3) above.Thank you for replying.
In Kaplan book, there is an example of Mr. Flint, the last point says, on 1 july 2004 he changed jobs and rented a flat near his new employers offices in Newcastle. Here he remained untilmhe sold his Southampton house on 1 february 2014 for £95000.
The answer says, after Mr.Flint left his residence to work in Newcastle he never returned. Consequently the exemption for working away from home in the UK is not available as there is not actual occupation both before and after period of absence.
I dont know if you have the book with you, but there was an actual occupation before it and after it was 18months exemption. Does it not contradict with the above rules?
Please ignore the last para. As Flint is working elsewhere in the UK and due to employment purposes he has to move to be near to his office, wouldn’t the re-occupation condition be relaxed for him?
From what you state above I see no reason why the 4 year period of deemed occupation is not given assuming he was still in that employment at the time of sale – hence was prevented from returning to the property by reason of employment!
Don’t know if they have a feedback forum to question their answer?If a person moves from Truro to Edinburgh for employment reasons (assuming 6 years), will it satisfy point (2) of deemed occupation?
If you are referring to point 2 above – any period working overseas – then no as Scotland is still in the UK!! 4 years would be available if the taxpayer was still in employment when the property was then sold and the last 18 months would also be available, but the 3 years for any reason would only be available if the taxpayer actually occupied the property again prior to its sale
Sir, I have a doubt in this question (BPP revision kit)
Jorge disposed of the following assets during the tax year 2014/15:
On 30 June 2014 Jorge sold a house for £308,000. The house had been purchased on 1 January 1997 for £93,000, and incurred a legal fees of £5000 in relation to boundary dispute with his neighbourThroughout the 210 months of ownership had been occupied by Jorge as follows:
Months
34 Occupied
18 Unoccupied – Travelling overseas
24 Unoccupied – Required to work overseas by his employer
11 Occupied
30 Unoccupied – Required to work elsewhere in the United Kingdom by his employer
22 Unoccupied – Travelling overseas
26 Unoccupied – Required to work elsewhere in the United Kingdom by his employer
17 Occupied
12 Unoccupied – Required to work overseas by his employer
13 Unoccupied – Travelling overseas
3 Unoccupied – Lived with sister
––––
210
––––
Jorge let the house out during all of the periods when he did not occupy it personally. Throughout the period
1 January 1997 to 30 June 2014 Jorge did not have any other main residence.
———————————————————————————————————–In this question during the calculation of PPR, according to me the total period of occupation is 198 months.
Everything else is fine except 12 months of worked overseas is not included in the answer and thus the answer shows 188 months of occupation.
There is no explanation in the kit
Thanks
Looking at the details you have provided I would agree that the non occupation would be 12 months (4 months of the 40 months travelling overseas – 36 months given for any reason and the last period of 13 months is covered by the last 18 months rule plus for working elsewhere in UK 8 months of the 56 months will be non occupation), therefore giving PPR relief for 198 months
I went through the same question in ACCA past papers and their answer also ignores the part of 12 months of unoccupied period (Required to work overseas by his employer).
I know that the answer from ACCA’s past papers would be irrelevant due to constant changes in the rules but I just wanted to be certain.
Thanks
December 2011.
The text says that – exempt periods of absence must normally be preceded and followed by the periods of actual occupation. This rule is relaxed where an individual who has been required to work abroad or else where is unable to resume residence in his home because the terms of his employment require him to work elsewhere.
I couldn’t understand this part.
It is what it says – if a tax payer is working overseas or elsewhere in the UK they do not have to return and live in the property prior to sale in order to benefit from the periods of deemed occupation. If you wanted the 3 years for any reason period then the taxpayer must return and live in the property prior to sale
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