Is there a timescale for PPR?

MoneySpendingExpert888

according to the gov:

You don’t pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply:

• you have one home and you’ve lived in it as your main home for all the time you’ve owned it
• you haven’t let part of it out - this doesn’t include having a single lodger
• you haven’t used part of it for business only
• the grounds, including all buildings, are less than 5,000 square metres (just over an acre) in total
• you didn’t buy it just to make a gain

I was just wondering on the actual context of the last statement because I wouldn't know how that last one can be justified.

I am looking to buy my first house, I've been looking at quite a few auctions for the areas that i like and have seen some bargains been snapped up.

But my only concern is with the statement above, if i buy a house at auction which is considered a bargain (assuming MV is at £100k and managed to buy it for £75k) then a year later it rises to £110k and i get tempted to sell the property due to the rise in value would that be classified as 'buying it just to make a gain'? even though at the time of buying I hadn't thought of selling but due to it now being profitable i decide to sell?

I understand that if i wasn't going to buy for profit in the first place then i wouldn't need to ask this actual question, but these days I'm sure 99% of home buyers look to buy a property which they think will hopefully rise in value whether that be in 1,5,10,20 years.

G_M

you didn’t buy it just to make a gain

my emphasis. If you've lived there, clearly it's your home. So you bought it as a home AND possibly to make a gain, but not just to make a gain.

booksurr

that clause is there to provide a basis under which HMRC can challenge you if there is, for example, a pattern emerging whereby you have a succession of purchases and sales each showing a gain. HMRC would then argue that you were buying to sell and in that case are a property trader liable to income tax not CGT

clealry such circumstances are unusual and hard for HMRC to prove. As a FTB you are scaring yourself totally unnecessarily. Buy it, live there fore however long you need to and then sell without fear

MoneySpendingExpert888

thanks for the advice guys, yes i think i was just taking the 'better safe than sorry' approach abit to the extreme in that instance. But at least my mind is at rest and i don't have to think about that issue any further.