Avoiding Capital Gains Tax

[AJS123]

I currently own my own home and a rental property. I am looking into selling the rental property and wondered if I could rent my own home out, move into the rental property whilst it is being sold and then move back into my own home? How long would I have to move into the rental property for before this is considered as my main residence?

[Tax Accountant]

Residence is a test of quality of occupation and not length of occupation. Having said this, 6 months should normally be sufficient.

If you actually let your current residence and move into the one being sold, I would consider that you should not have any problems in establishing that you have occupied the property as your ONLY residence. PPR would apply for the last 3 years and you would also get lettings relief, taper relief and annual exemption.

If married, it may help to have the property jointly as this would give two lots of letting relief and annual exemptions.

Ramnik

[AJS123]

Forgive me but what is PPR?

[Tax Accountant]

PPR stands for Principal Private Residence. You would qualify for CGT exemption for the period during which a property has, or deemed to have been, your PPR.

Ramnik