Can newly married couples maintain their PPR status??

I've recently got married. Both my wife and I had already bought houses before we got married and in each case the houses were our Principal Private Residences. The houses are less than 1km apart.

We were both operating the Rent-A-Room scheme.

If one of us moves into the other's house, the person who moves will lose both PPR status and Rent-A-Room scheme. The implications for Capital Gains Tax are huge.

So how about his.

• I stay in my house 4 nights of the week, she stays with me for 3.
• She stays in her house 4 nights of the week, I stay in her's for 3.
• We agree to be taxed separately (both on top rate of tax)

Sounds silly but I don't sse why I should suddenly be much worse off than I was before I got married.

Can I meet with Revenue to tell them of my plan? I want it agreed in advance with Revenue. Not to have to argue it down the line when I sell my house.

By the way "In ... the Murphy case [1982], I.R.241, the Supreme Court held that the State could not tax a married couple, both of whom are working, more severely than two single people." http://www.finance.gov.ie/Viewtxt.asp?DocID=1158&UserLang=EN&StartDate=01+January+2004

A married couple can only have a single joint PPR.

"a married couple living together can only have one PPR"

My entire point is to challenge the definition of living together.

I'm sure that a lot of people are in the same position as me.

Maybe it will take a new court challange.

In the meantime I will take your advice and get professional advice.

Thanks for the reply!

This will only effect CGT from the gain from when you got married............If you sell one of them then the length of time it was a PPR will be taken into account...........& no claw back of rent a room relief.

Would make most sense to rent out whole house anyway - you will earn more income this way which yes you will pay tax on but you can net off interest on mortgage as well as deprec on furniture etc.

sounds like a lot of hassle moving between houses............

gidxl03 said:

"a married couple living together can only have one PPR"

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I would assume that Revenue take the view that married couples normally live together unless they are separated or being divorced. On this basis I also assume that they take the view that married couples can only have a single joint PPR. I very much doubt that the strategy outlined above would cut any ice with Revenue in terms of them accepting that you had two PPRs. At best I reckon it's an avoidance approach that they would deem in contravention of their anti-avoidance rules.

ClubMan said:

I very much doubt that the strategy outlined above would cut any ice with Revenue in terms of them accepting that you had two PPRs. .

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I have one PPR as I always had.
She has her PPR as she always had.

Keeping the status quo before we got married should hardly be illegal tax evasion - especially when we agree to continue to be taxed seperately so as not to cherry-pick married benefits (of which there are few anyway).

PS I must read up on tax avoidance. I thought tax avoidance was OK but evasion was illegal. Any URLs would be appreciated on this topic.
PPS Found one, bad news for me!
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"As with most tax reliefs, there is an anti-avoidance measure which states that the relief will not apply if you reside in the new house simply for the purpose of obtaining the relief." However he does say that I have a 12 months grace period (not sure where I read 6 months). So I can sell just when the SSIAs come out - some consolation!

Thanks Winne, I've done some calculations and there is no doubt that renting the entire house out is much less effective that keeping my PPR status. My asset gain is huge, my mortgage is nearly nill. I am not optimistic about further increases in the asset gain. Rental market is already soft. Unless I can find a way to keep my PPR status I will sell the house in the next 5 months.

gidxl03 said:

I have one PPR as I always had.
She has her PPR as she always had.

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As far as I know it doesn't matter and Revenue will most likely determine that you, as a married couple, now have a single PPR. However if in doubt ask them and/or get independent professional advice.

PS I must read up on tax avoidance. I thought tax avoidance was OK but evasion was illegal. Any URLs would be appreciated on this topic.

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Not all avoidance measures are legal.

However he does say that I have a 12 months grace period (not sure where I read 6 months).

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Yes - you have up to 12 months to dispose of a former PPR before it becomes classed as an investment property.