Avoiding CGT by declaring PPR

A

antanas

Guest
I understand it is legal (but not morally correct) to avoid CGT in a 2nd home sale by living in it for a period not less than 6 months.My wife and I own a 2nd home in which my elderly mother lives rent free.(She now wishes to live in a bungalow and I have to help finance the bungalow by selling the 2nd home)
My question is, if I or my wife and I, move to the 2nd home with my mother and declare it as our PPR what are the implications to the tax status of our own property which shall remain empty for that period?
Kind Regards
Roger
 
PPR relief is granted on a time basis, so moving into a property for just 6 months will not work to completely wipe out your CGT liability on any gain.

However, you can claim PPR relief on a property which is occupied, rent free, by dependent relative or a widowed parent. So, if your mother has lived in your second property rent free for all the time that you have owned that house (and she was either widowed or she was a "dependent relative" for that period) then you won't have a tax liability.
 
The Revenue Commissions do not accept that a married couple can have separate PPRs.

I have heard of very exceptional circumstances due to work commitments, but its really not as easy as you suggest.

If you both move to the second house, your first house becomes a NPPR for that time.
 
Nige said:
PPR relief is granted on a time basis, so moving into a property for just 6 months will not work to completely wipe out your CGT liability on any gain.

However, you can claim PPR relief on a property which is occupied, rent free, by dependent relative or a widowed parent. So, if your mother has lived in your second property rent free for all the time that you have owned that house (and she was either widowed or she was a "dependent relative" for that period) then you won't have a tax liability.
Click to expand...

Thanks Nige,
That response has motivated me to drill down into the HMRC site,only to find that I am not eligible for the relief as I bought the house post 1988 :(

I still can't find anything linking your comment "time basis".Are you able to explain any further?
Regards
Ant
 
huskerdu said:
If you both move to the second house, your first house becomes a NPPR for that time.
Click to expand...

Thanks huskerdu,
NPPR is "Not PPR" I assume,but do you know the tax implication of leaving our home empty for a time while moving in with mother?
Would our home then itself become subject to a taxable gain for the period it was left empty (when we eventually sell up to move to our care home);)
Regards
Ant
 
antanas, this is an Irish website and the information given is based on Irish tax law. Are you in the UK?
 
Stunned silence :eek:)
I didn't know it was an Irish site.....yes,I'm in England.
Ant
 
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