Principal Private Residence

toothwiz

Hi please could someone tell me at what point a 2 year Principal Private residence election starts. We exchanged at the beginning of June 2008 but completion did not occur till 31st July 2008 .
Then we moved in and legally took up residence. I dont understand how an election can start at exchange if the previous owners are still residing in it. Please clarify

silvercar

It doesn't really matter, as long as you make your declaration within the first 2 years of ownership you can change it whenever you want.

00ec25

it is from the point at which you first have a combination of more than one residence
sorry I cannot held you with a legal defintion of whether that starts from exchange or completion, but most things are based on exchange (eg CGT liability starts from exchange not completion). The fact the previous people reside in it between excahnge and completion is irrelevant, the contract is committed from exchange and you are the owner from that point, hence for example you have to have insurance in your own name from exchange

but one thing you can be certain of is it will not start from when you moved in

so you are either 38 days too late and have lost your chance or you have another 24 days to make a valid election.

Simple solution is to phone HMRC and ask them

00ec25

silvercar wrote: »

It doesn't really matter, as long as you make your declaration within the first 2 years of ownership you can change it whenever you want.

with respect the question is how do you define ownership

1 june 2008 - 7 July 2010 = >2 years so too late
31 July 2008 - 7 july 2010 = 24 days less than 2 years so still time

Jowo_2

on this subject, does a landlord returning to live in their rental property have to formally switch addresses with the HMRC for it to count as their PPR?

00ec25

Jowo wrote: »

on this subject, does a landlord returning to live in their rental property have to formally switch addresses with the HMRC for it to count as their PPR?

if a valid election has been previously registered naming the current home as the PPR, then yes the only way to change it to the now ex rental place is in writing

twirlypinky

I did all this in december in my AAT tax exam. Funny how quickly you can forget it all when you don't use it!

From what i do remember, the dates that count for calculating the relief, are only the ones where you actually reside there - purchace dates are irrelevant.

These sites are usually designed to be clear and consise for the non accounting readers:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4020890

silvercar

00ec25 wrote: »

with respect the question is how do you define ownership

1 june 2008 - 7 July 2010 = >2 years so too late
31 July 2008 - 7 july 2010 = 24 days less than 2 years so still time

Apologies, I mis read.

If you haven't made a declaration in time then the decision is based on the facts. So if you haven't declared but are actually based primarily at one place, that is the one that counts.

Note that you can't declare a property to be your PPR if it is let out. Any property declared to be your PPR has to available to you.

jockosjungle

Try speaking to HMRC or writing, there is likely to be an extension of time given if you didn't realise you had to make an election

R

00ec25

here is the definitive rule per HMRC, which appears to suggest it is not from exchange as i said but is from date of use as a residence

I remembered the quote about first combination but not how you apply that to an actual date. I would be very surprised if an extension of time is given for ignorance

http://www.hmrc.gov.uk/manuals/cg4manual/cg64495.htm

post the question on the tax cutting board and one of the experts on there may advise