CGT on home that has only been main residence for one year of fifteen

CGT on home that has only been main residence...

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 Please could someone just confirm my understanding of private letting relief.

Client purchased home in 1996, let it for 13 years, did it up and has lived in it for one year.   They are having to sell now, due to personal reasons.  Am I correct in thinking they get the last three years private residence relief and also private letting relief to this same value, as this is the lower of £40,000, gain due to period of let and the private residence relief. 

Please could someone just confirm that I have this right, or not. 

Thanks

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By TaxationPete
14th Jun 2011 17:07

Bit tight

Did they own any other property at the time of moving in, and what was their intention when they did so.

 

Reagrs Peter

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Euan's picture
By Euan MacLennan
15th Jun 2011 11:47

Basically, Yes

Provided that they can demonstrate the quality of their residence in the house (notifying HMRC of their change of address, going on the electoral register, etc.), it should qualify as their residence and they would be entitled to PPR for the last 3 years of ownership and for lettings relief as you have said.

However, problems arise if they kept another property, which had previously been their home, for the year they were doing up the previously let property and if they then return to that previous home before or after the sale of the previously let property.

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