Saving Tax on Purchasing a Second Property

Q. We have just purchased a second property, which we intent to occupy at weekends to escape the hectic city life. We’re both in our 50s and want to start slowing down a bit! I’ve heard that there is planning that can save tax on second homes – I believe MPs are infamous for using it. Can you explain what this is?

A: Where you genuinely occupy more than one property as a residence for at least some of the time, you are entitled to make an election to specify which one is to be treated as the main residence for the purposes of private residence relief. It doesn’t matter which property you actually live in most of the time, as long as you do occupy both as a home. This can be beneficial if the property you occupy less frequently is likely to appreciate in value more than the other. In the absence of an election, HMRC will determine which was the main residence based on available information, and may result in a larger gain being chargeable. You need to make the election within two years. HMRC’s guidance is useful here.




Powered by BetterDocs

Feeling Lost with Finances?
We're Here to Help!

Tax filings
0 +
Accounts filings
0 +

Request A Callback

Call Now