2 houses: how do revenue know which one is PPR?

[madmammy]

Hello there, this is my first post so I hope it is in the correct area

In autumn of 2006 I bought and moved to another house and subsequently put my old PPR on the market. However, almost a year and a half later it still hasn't sold, and of course I have no idea when it is likely to. I know there is a year cutoff point whereby your old PPR ceases to be your PPR and CGT is payable from there on in on the portion it isn't your PPR but how would revenue know that it's not, particularly when I am still claiming TRS on the old PPR? It hasn't been rented out or anything like that.
Also on the subject of CGT, some years back I rented out a section of the house that was a granny flat but has since been reincorporated into the entire house. As I declared this income to the revenue at the time (but didn't specify an address or anything) a friend tells me I will be liable for CGT on this portion of the house when/if it sells. Again, how can the revenue determine this, especially as it is now part of the house again?

Just feel that with the house losing more and more value as time goes on, any potential CGT liablility on top of this will hit hard, so am thinking of just saying nothing and paying nothing whenever the house is sold.

What do you guys think?

 

[ClubMan]

I know there is a year cutoff point whereby your old PPR ceases to be your PPR and CGT is payable from there on in on the portion it isn't your PPR

If you don't dispose of the former PPR within 12 months of vacating it then CGT on some portion of any eventual resale gain applies.

but how would revenue know that it's not, particularly when I am still claiming TRS on the old PPR?

This is illegal. You should not be claiming owner occupier mortgage interest tax relief on a non PPR mortgage. There is an element of self declaration on this issue which is open to abuse by fraudsters and tax evaders. The fact that this may be possible in no way mitigates the illegality.

Also on the subject of CGT, some years back I rented out a section of the house that was a granny flat but has since been reincorporated into the entire house. As I declared this income to the revenue at the time (but didn't specify an address or anything) a friend tells me I will be liable for CGT on this portion of the house when/if it sells. Again, how can the revenue determine this, especially as it is now part of the house again?

You probably need professional tax advice on this. And you need to stop claiming owner occupier mortgage interest relief on the non PPR mortgage and pay back any relief receive when you should not have received it.

Just feel that with the house losing more and more value as time goes on, any potential CGT liablility on top of this will hit hard, so am thinking of just saying nothing and paying nothing whenever the house is sold.

What do you guys think?

Get professional advice and rectify the current anomalous tax situation ASAP.

 

[madmammy]

The TRS claim was more of an oversight on my part in not changing it from one house to the next, not a conscious decision. But as a result I am not claiming TRS on the new property so I don't really see it makes much difference as I would still be receving TRS in any case, so I see no reason why I should have to pay this back?

 

[ClubMan]

The situation is anomalous and needs to be sorted out. You should not be or have been claiming owner occupier mortgage interest tax relief on a non PPR mortgage. Sorting it out may well balance out but you need to rectify the situation.

 

[madmammy]

OK clubman fair enough but as things stand, it does mean that the revenue would still see my old PPR as my current one so to be perfectly honest, am not exactly going to go out of my way to change that if it means that I'll be landed with a big CGT bill down the line. Don't see any harm in that at all...

Anyone have any other opinions on the old flat and whether it too might attract CGT in the event of a sale? Again, I can't see how revenue could know in any case.

 

[ClubMan]

OK clubman fair enough but as things stand, it does mean that the revenue would still see my old PPR as my current one

But it's not. This and the fact that you are/have been claiming owner occupier mortgage interest tax relief on it is the anomaly that needs to be sorted.

so to be perfectly honest, am not exactly going to go out of my way to change that if it means that I'll be landed with a big CGT bill down the line. Don't see any harm in that at all...

It is tax evasion. There is a lot of harm in it.

Anyone have any other opinions on the old flat and whether it too might attract CGT in the event of a sale? Again, I can't see how revenue could know in any case.

Again you seem to be looking for advice on how to evade tax so I am closing this thread.