Is it a residence?

Given the surge in property values over the last ten years or so, there are lots of people holding properties with substantial gains. I've also noticed more and more people looking to cash in on this even more by buying properties to let or selling of part of their garden or grounds for development. We've covered the tax issues relating to lots of these in articles on the site, as well as in the forum (eg this one on one selling part of your garden or this one on converting a barn. One of the key reliefs available to anyone holding residential property is claiming principal private residence ('PPR') relief. Unlike many other countries the UK operates an exemption system which provides either a full or partial exemption of any gain arising. Some other EU states only provide a deferral of the tax - which is not as beneficial. This means that claiming PPR relief is even more important. Something that crops up regularly is the question of a PPR election. It's pretty common knowledge that it's possible to elect a property as a main residence, but the details of when and how this is achieved are pretty scarce. I've wrote a new article on this (click here for details of this article which also includes a sample PPR election for anyone looking to make an election). One of the limits of the election is that it only applies where you own two or more residences, and not two or more properties. Therefore you'll need to actually occupy properties to make the election. What actually qualifies as occupation to make a property a residence is not defined anywhere. You could in theory qualify with occupation of three months but in practice 6-12 months plus is usually required. This occupation though can save you a fortune in CGT. Not only do you get the PPR exemption, with the last 36 months deemed occupation, but if it's been let you can also qualify for lettinsg relief (up to a further £80K exemption if you own jointly). This is the big attraction for many property owners and if handled correctly can make property investment very tax efficient. Also note that it can apply to overseas properties.