Principal Private Residence relief on sale of part of property

Posted by Amanda Lambert PM | on Sat, 28/08/2010 - 19:22 527 2 comments | report

My client sold part of his home a few years ago which I would assume is covered under the Principal Private Residence exemption. However, he is now incurring costs on another part of the property, with a view to selling this part as a 4 bedroomed house, and his intention is to remain in the rest of the house. My feeling is that this sale will not be covered by PPR and there will be a gain on the difference between the proceeds and the costs involved in developing that part of the property.

Does anyone have any comments on my thoughts?

Greatly appreciated.

Thanks

Amanda L

Comments

See HMRC guidance and examples

michaelblake | Thu, 16/09/2010 - 19:34 | Permalink

Amanda

There is guidance on how HMRC approach this in the CG manual at paragraphs 65200 to 65271 and in particular at 65265 and the worked examples that follow

see link at http://www.hmrc.gov.uk/manuals/cg4manual/CG65265.htm

-- Michael Blake

Principal Private Residence relief on sale of part of property

Amanda Lambert | Fri, 17/09/2010 - 07:46 | Permalink

Michael

This is the conclusion that I came to and shall be dealing with the sale of the divided part of the house as exempt under PPR for the part of ownership before the property was divided, with a potential gain after, taking into account the last 36 months of ownership. Letting exemption is not relevant in this case.

Thank you for this and I appreciate your help.

Amanda