If you live in a property which was previously part residential and part business and part rental how long does it take to become PPR after trading and rental activities cease and the whole property has been used only for your own needs?

Arthur Says

The answer to this question depends on the facts of the case:

A: If you continue to live in the property while letting part of it, your capital gains exemption (PPR) is not affected if the letting takes the form of boarders who effectively live as part of the family.

B: Where, however, the letting extends beyond this, then the appropriate fraction of the gain on disposal is chargeable, but there is a letting exemption available to reduce this chargeable gain.

This letting exemption is not available if the let part of the property is effectively a separate dwelling, such as a self-contained flat with its own access. But where part of the home is let, without substantial structural alterations, it will qualify, even if it has separate facilities.

C: When business and rental activities cease, then the owner will continue to get PPR relief only on the area actually occupied for personal needs, unless they start using the whole property personally. The time required for this is the same as for moving into an entirely new property and making it your PPR, i.e. perhaps six months to a year.

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Arthur Weller is a Chartered Tax Advisor (CTA) and an integral part of the Property Tax Portal team. He offers a special rate tax advisory service on any aspect of UK taxation, including property taxation, for as little as £97 for a 30 minute telephone tax consultation.

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