Related Links

BrassTax news

Don’t rush into elections

No. This is not advice to Mr Brown. It’s about CGT "Main Residence" elections.

We have banged on ad nauseam about the need to make an election under s222 whenever there is a change in the number of homes a person has. The making of what may appear to be a pointless election in favour of what is in fact the main residence (and on which PPR relief would be given regardless of the election) has the important effect of keeping the position open for a variation of the election at some future date. If the "pointless" election is not made, you may well be out of time to make an election by the time you actually need one.

But that is as much as you need or should do until a disposal of one of the homes is in prospect. The practice of sending an election on a "circular tour" (electing for each home in turn before finally settling back on the actual main residence) may be counter-productive. In these uncertain times one or other of the homes may yield a loss on its eventual disposal. Any premature PPR election in respect of such a property made in a surfeit of enthusiasm at the outset will restrict relief for such a loss. Better to keep your powder dry: make a single "pointless" election for the actual main residence at the outset and reconsider the position before any disposal. "Simples" (as Aleksandr would say).

For more information please contact your usual consultant or contact us on 0208 922 9201 or help@bkltax.co.uk.