letting ppr

[fernfurn]

We have bought another property (a) which will be our ppr as soon as we can sell our existing ppr. Property (a) has an existing tenant which we will leave in place until we can sell and therefore move in. We expect this to be no more than 6 mths. Are there any cgt implications if we sell at a later stage?

 

[wylie]

My understanding is that you will pay pro-rata for the time it was an IP. If it is only six months or one year and you stay a long time, it will not be a big issue.

 

[frini]

From my understanding, you are only allowed 1 PPOR, however there can be a 6 month 'cross over' while you transfer from one to the other, as in your example.
As the new property you bought will be tenanted from day one, then unfortunately there will be CGT implications when you sell, regardless of whether it was intended to be your PPOR or not.
This will be apportioned between the time you rented it, and the time you lived in it as your PPOR.
This is definitely something you should get your accountant to discuss with you, to work out the best strategy.
If you do plan on selling in the future, you may be better off requesting vacant possession on settlement, and forgo any rent, so you don't trigger a CGT liability.

 

[wylie]

If you do plan on selling in the future, you may be better off requesting vacant possession on settlement, and forgo any rent, so you don't trigger a CGT liability.

The tenants are protected by their lease, so requesting vacant possession can only work if the vendor arranges for the tenant to leave early. It really is out of the hands of the purchaser.