Last week, we looked at the tax relief which exempts your main home from tax on sale.
But what happens when you have more than one home?
You can only have one PPR for tax purposes. However you do have the option of electing which of your homes is your PPR. This enables you to protect the property with the greatest capital growth from tax.
You have two years following the acquisition of your second property within which to make the election, this is made formally to HMRC. In the absence of an election the PPR is determined on the basis of fact.
Once validly made an election can be varied at any time with retrospective effect of up to two years, giving a good opportunity for capital gains tax planning.
Therefore if you acquired another home within the last two years consider making an election now…before it is too late, the future tax saving could be considerable.
For more information please contact Lesley Sutton on 01484 538351 or email firstname.lastname@example.org.