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Letting relief

I have husband and wife clients who purchased a property for £185,000.00 as their main residence in April 2000 and lived in it until August 2004. Since then it has been let. The property will be sold this month for £317,500.00. I calculate that the capital gain = £55,208.33 ( ie the difference between the purchase and sale price x 5/12 ) . Is the calculation based on whole numbers of years, or months, and in any event would the resultant figure be exempt under the rules of letting relief?

Thanks

John.

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03rd Jul 2012 13:54

I suggest you read HS283 on the HMRC web site. They will be entiltled to PPR and Letting relief. The calculation is often done in Whole Months for PPR and whole days for LR however the calculation can all be done in Whole days if it is the owners interest. Regards Peter

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03rd Jul 2012 12:43

PPR & LR

YEAH ITS IMPORTANT TO LOOK AT THE 2 RELIEFS SEPERATELY.

1)ppr-complex occupation/absence for any reason/1st 3 years rules-MONTHS-WORK IT OUT 1ST

2)lettings relief which is the lower of the 40k or the gain-after the above- does NOT have any time rules provided it is a let residential property AT SOME POINT

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By ACDWebb
03rd Jul 2012 13:26

As above

though on the face of it PPR/OMR plus the letting relief should I think reduce the chargeable gain to nil

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03rd Jul 2012 14:07

Assuming they both own the house thus two sets of LR then PPR and total LR will relieve any CG with some considerable head room. The disposal still has to be reported to HMRC. Regards Peter

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