Walterp
Member
- Location
- Pembrokeshire
Quite awkward.There is no main farmhouse, he lives elsewhere with his wife and I believe it is her house not his. As they are married I don't know if it makes a difference who owns it.
The procedure is simple enough, as you probably know - simply elect in writing to HMRC to make the new house the farmer's PPR.
It might hard to find a professional adviser to propose this course, because it would involve the farmer (and his wife, unless he is separating from her) moving to live there.
So far, so good.
The problems come afterwards: if the farmer then transfers the house after a very short time (there is in fact no set qualifying period) the HMRC may refuse the relief on the grounds that it was a sham.
The tests are related to the 'quality' of the occupation, and have been developed because tax-payers have been seeking to attach PPR to buy to let properties in an effort to avoid CGT.
If the farmer then moves back into the dwelling he first lived at, he is then scuppered in my view: HMRC might subsequently assess to CGT (who are we kidding, they'd jump at it), leaving the farmer to pay the tax and then challenge it and justify his behaviour. Not an attractive prospect, I suggest.
Short Version: I can't make up my mind if it's a stupid idea, or a risky one, or both. But you can see why no professional adviser would advise it.
There is an alternative view: we all need State social, education and health care; the OP should accept that they did not design their tax affairs as well as could have been, and just pay the CGT.
These services are not only funded by Other People.
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