I need to brain storm with someone. Client sold a house which they now need to calculate CGT on. I am confusing myself as to which months to include that falls within lettings relief.
Basically property acquired in Dec 2000, lived in until Feb 2004 (38 months)
Rented out from Feb 2004 until May 2007 (39 months)
Moved back in May 2007 until Nov 2009 (31 months)
Rented until sold Nov 2009 until Oct 2012 (34 months)
Total ownership was 142 months.
Gain is £87,000
How do I factor in the first rented period? Is it that PPR is 105 months (ie 38+31+36 (deemed) = 105/142
and lettings relief is based on 39+34 = 73/142. I am not clear how the first let period is taken into account when individual moves back home.
The upshot is no CGT will be due (either eroded fully by PPR (if I ignore the first let period - which seems wrong) or by a mix of PPR and lettings relief. I am trying to clarify the logic.
Thanks in advance