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Tax Advice


Adam

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Hello all,my current situatation is as follows-Iam living with my partner,the mortgage is in her name.I have 2 buy to let properties and am just about to complete on another house.I have decided to purchase this one on a normal residential mortgage for a couple of reasons,lack of 15% deposit and having applied for previous btl mortgages my choice of lenders has been narrowed because I wasn't an existing homeowner.After I have carried out some remedial works I would like to either change it onto a btl or consent to lease(Halifax bs will let me do that).Anyway after that my question is do you think I would better off keeping it empty for a while and saying I live there,will there be any tax advantages to doing this?.How long would it have to be my ppr and what evidence would the inland revenue need?Many thanks Adam

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Hi Adam

In order to be able to elect the new property as your PPR there has to be some quality of residence - ie. Furnished, all utilities incl Council Tax etc. You cannot just elect an empty property for PPR purposes.

If you are able to establish some quality of residence (so maybe live there as well as in your other home for a short period) then you may be able to make a PPR election for your new property - it would need to be done within 2 years of buying the new property. If you do this you would need to then vary the election back to your main property after a short period - say a month. By virtue of now electing your new property as a PPR for a temporary time, you will be entitled to the last 36 months of ownership under PPR, also, if you then decide at a later date to rent said property, you could also be entitled to lettings relief to further reduce the gain if you sell the property.

Remember that for the period you elect another property as your PPR, your main home will lose its PPR status, however, given the short periods involved, this often has no material impact and would normally be covered by your CGT annual exemptions.

I hope this helps

Sherena

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