6 year CGT rule and the granny flat

If I were to build a granny flat at my PPOR with a view to live in the granny flat, could I still claim the 6 year CGT exemption if I was not claiming any other property as my PPOR for that period?

 

possibly if you moved out. But not if you are living there as you are not absent.

 

And paying yourself rent ??

You would the retain land tax exemption.

 

Not paying myself rent. But the tenant in the main house would be.

 

I believe you can if you live in both the granny flat and main house when you move back in

 

Yes this may be the case.

 

There is a complicated and uncertain interaction between s.118-120 (adjacent land & structures) and s.118-145 (absences).

s.118-20 treats a CGT event in relation to adjacent land and structures to be part of a CGT event in relation to the dwelling.

s.118-20(5): The land/structure must have been used primarily for private or domestic purposes in association with the dwelling.

Problem: One view is:

The GF is being used as a dwelling in its own right during the absence and so you must choose either the main house (with its rented adjacent land) or the GF (with its own adjacent land) as the exempt main residence under s.118-145.

You have 2 dwellings during the absence.

Better get some advice whether a pbr is a good approach.