The Finance Bill 2019/20 contains new rules on PPR relief.
PPR relief is amended for disposals (exchange of contracts) on or after 6 April 2020. In summary, be aware of the following:
- PPR entitlement will be restricted during the final period of ownership to a period of deemed occupancy of nine months, reduced from 18, ending with property disposal
- letting relief is restricted to periods of shared occupancy of the owner with the tenant. The bill does not define what constitutes ‘letting’, but refers to ‘sharing with someone who does not have interest in the property’. It does not mention whether payment of rent is a necessary condition
- in case of multiple properties held, the usual time limit to make a nomination to determine which property is the main residence is within two years of the last time the selection of your homes changes; the Bill extends the two year rule and allows a late nomination, in very limited circumstances: where all but one of your homes is of negligible market value (ESC D21 will be enacted as part of legislation from 6 April 2020 and removed). Negligible market value has not been defined in the Bill
- where on or after 6 April 2020, a property is transferred to a spouse or civil partner, the property’s history (such as purchase cost, type of occupation, use etc.) is transferred with the dwelling to the receiving spouse / civil partner. This applies to any residence, whether main or not
- where a main residence is transferred to a spouse or civil partner, the receiving spouse or civil partner ‘inherits’ the qualifying letting period, of their spouse (the transferring spouse had to share the residence at the time of their occupation with a tenant)
- members of the armed forces receive an armed forces accommodation allowance to help pay for the accommodation they choose to live in. They will be eligible for job related accommodation relief on their main home
- a time delay of up to two years between the acquisition and the occupation of a self-built or purchased main residence will not affect the owner’s entitlement to PPR. This is conditional on no one else using the property as a residence during the delay period (ESC 49 will be enacted and withdrawn from 6 April 2020).
Article from ACCA In Practice