H&W have sold their rental property. They lived in it for 51 months, owned it for 185 months.
I am doing the CGT on disposal
The property is jointly owned. Can they each claim the £40,000 lettings relief or do I need to split this between them? Many thanks
Total period of ownership | 185 |
Period of occupation | 51 |
Deemed occupation | 36 |
Total occupation | 87 |
Qualifying Ownership (87/185) mths | 0.47027027 |
PPR relief | £ 52,906.91 |
(Qualifying ownership x Gain) |
Letting relief for period Oct 2001 - Nov 2012 | Mrs | Mr | ||
Lower of: | ||||
Cash sum | £ 40,000 | £ 40,000 | £ 40,000 | |
PPR | £ 52,907 | £ 26,453.46 | £ 26,453.46 | |
Gain on Letting | £ 81,488.80 | £ 40,744.40 | £ 40,744.40 | |
Replies (10)
Please login or register to join the discussion.
It's £40,000 each...
... or in your case £26,454 each. Assuming:
that the 51 months occupation is at the beginning and is occupation as the only or main residence (actual or elected, andthat it was jointly owned throughout (or was transferred into joint ownership whilst occupied as the only or main residence).
PPR is done in whole months or if favourable whole days. LR is always done in whole days. You also do not mention SDLT, legal and sales fees of acquistion and disposal. Regards Peter
Almost correct
In this case it doesn't matter because the PPR gain is still less than the gain arising from letting, and so is the limiting factor - but the gain otherwise chargeable by reason of letting is not £81,489. It is £59,596.
Agree with BKD - gain attributable to the letting should exclude last three years already covered by PPR.
Cue heated debate.
No heated debate from me
I agree with BKD, but I'd only got as far as the letting element being just under 53% while the PPR element was only 47% but was more than £40,000 each. I hadn't bothered working out an amount and it didn't undermine Thomas's conclusions.
Welcome back BKD hope you had a good holiday.
Thanks, Steve
Holiday was excellent, thanks - though nice to return to the relatively cool air (bordering on 40 most days where we were - I can cope with it, the kids found it a bit too much).
Steve
My comment was certainly no criticism of your comment - apologies if it was taken that way.
Indeed, welcome back BKD.
No, no offence taken
I'd simply realised that in BKD's absence I hade been adequately pedantic! :)
Triggle wrote:
Agree with BKD - gain attributable to the letting should exclude last three years already covered by PPR.
Cue heated debate.
Not sure about heated debate, but there was a discussion about 8 years ago that the fractional approach (which could include the last 36 months) is a possibility. This is the calculation used by HMRC itself in its booklet IR87 (now defunct).
However, IMHO, HMRC was/is wrong on the fractional approach.