Key Post CGT implications of keeping your PPR as an investment after trading up

Brendan Burgess said:
First, they will have had to have a big rise from the date of purchase to date.

And then the big fall would have to repeat itself.
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Not really Brendan.

Even with moderate price growth during the period when the property is held as a rental, a sell and rebuy approach would still produce a lower CGT liability.

I'm increasingly convinced that @Bronte's advice to "bank the CG and start again" is the right approach from a CGT perspective.
 
I've done a table below. It's based on CSO average prices for all properties since 2005. I'm assuming a 10% fall in prices in 2020 compared to 2019, and then 2% pa increase after that. It's the CGT payment as a share of selling price in a given year, based on converting from a PPR to rental in 2020, conditional on what year the property was purchased.
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As you can see for boom-era purchases it takes a long time and/or a big increase in prices for CGT to become material. For purchases 2011-2015 it begins to bite pretty soon.

If anyone sees what looks like an error please let me know.
 

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Can you elect your PPR in a scenario where you have two houses (1 actual ppr and 1 rental)?

If you sell the rental can you elect to use ppr relief for a certain period for the sold rental and therefore forego the ppr relief for your actual ppr if and when you were to sell actual ppr?
 
jim said:
Can you elect your PPR in a scenario where you have two houses (1 actual ppr and 1 rental)?

If you sell the rental can you elect to use ppr relief for a certain period for the sold rental and therefore forego the ppr relief for your actual ppr if and when you were to sell actual ppr?
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No, the tax treatment simply flows from the facts.

e.g. I buy a place, live in it for 10 years, move out, keep it for another 10 years, and then sell it.

‘11/20 x Gain’ is the amount of the gain that’s exempt

It just is what it is.
 
I think it is possible to elect ppr where there is more than one residence if time is spent in both? So you might be in luck.

But as gordon says, it should be based on the facts.
 
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Thanks both.
I understood that one could choose which residence is their ppr if they have more than one.

I will enquire with Revenue.

Thanks.
 
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