August 2010 A Married couple purchase a house for £442500 intending to renovate it and live in it - but continue living at their previous address whilst renovations are done.
Renovations take longer than expected
August 2011 Couple let the property at a low rent, even though the renovations are not completed - to secure the property and prevent theft etc.
December 2014 Renovations complete with reciepted costs of £50000 - tennant moves out and the couple move in. Couple nominate the renovated house as their PPR (no previous nominations made).
August 2015 Couple sell the fully renovated house for £750000
What is their CGT bill?
Total gain: £750000-£50000-£442500= £257500
The first 12 months whilst being renovated and the last 18 months count as PPR https://www.gov.uk/tax-sell-home/absence-from-home
i.e 30/60 months count as their principal private residence
That makes the gain reduced to £128750
They are able to claim letting relief for the 39 months it was let out - this is up to £40000 each https://www.gov.uk/tax-sell-home/let-out-part-of-home
TOTAL TAXABLE CAPITAL GAIN: £48750 (£24375 each)
Am I barking up completly the wrong tree with this calculation?