Avoiding Gain Tax when selling second house...

[bacchus]

Here is a case i am wondering about:

2 houses: one is PPR (House 1), the other is rented (House 2).
Want to sell House 2 but not pay Capital Gain Tax, (and do not want to sell House 1)

So idea is to move into House 2 so that it becomes PPR, then sell it (do not pay CGT as it is now PPR) and then move back into House 1

Does that work?

How long do i need to live in house 2 for it to be my PPR?

Thanks

 

[ClubMan]

You will not totally avoid CGT in this way. Since house 2 was rented at least a portion of the resale gain will be assessable for CGT anyway even if it becomes your PPR. Even if house 2 legitimately becomes your PPR in the meantime then what happens house 1? If moving into house 2 as your PPR is feasible then you might be better off selling house 1 and making house 2 your permanent PPR. You should get independent, professional advice on tax matters such as this to avoid falling foul of the relebvant tax rules.

 

[Kilkenny Tax]

Also, must notify Inspector that 2nd house is to become PPR... only when the Inspector agrees, is the 2nd house deemed your PPR.

In addition, there should be no profit motive - PPR relief does not apply where there is a profit motive from the outset (as there would be here).

Finally, Section 811 of the Taxes Acts is an anti-avoidance provision that states that where something is done solely for the avoidance of tax, then Revenue (through the Courts) can go after you.