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CGT and PPR and Lettings Relief?

CGT and PPR and Lettings Relief?

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I have a client who purchased a property in 1988 and lived in it until 2006 when she bought another property with her partner so moved to that one and let out the initial property until 2013.

The second property she resided in was jointly owned till 2010 when she bought her partner out and then rented it out, staying with friends at that point, also renting that property out until 2013 when she moved back into it.

The first property was rented till mid 2013 whereupon renovation work was required. This is still owned.

Client having renovated the first property now wishes to sell it.

Am I right in thinking she will be able to claim PPR on the first property along with Lettings relief and thus negate any possible CGT payable on sale?

I must admit that this is buzzing around my head at a confusing rate of knots at the moment.

Replies (7)

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By johngroganjga
15th Apr 2014 08:57

Yes she can claim PPR and

Yes she can claim PPR and lettings relief on the first property.  Why are you in any doubt?

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Replying to Adrian Smart:
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By grahamstone1
15th Apr 2014 09:51

My doubt was over the period she neither resided in either property but stayed with friends.

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By johngroganjga
15th Apr 2014 09:58

You only asked about the first property.

From what you say it was her PPR from 1988 to 2006 (and will be deemed to be for the last 18 months before sale).  Then it was rented from 2006 to 2013 so lettings relief will be available subject to the £40,000 cap. 

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By RetiredTax
15th Apr 2014 17:21

CGT calcs
Agree with John as to the Ppr & letting reliefs being available. However as you give no numbers we cannot be certain that you will "negate" ALL CGT. Until you crunch the numbers you cannot be certain there will be Nil tax to pay.

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By grahamstone1
16th Apr 2014 17:27

House 1 cost 55k in 88 now being sold for 155k. Renovations which have never been relieved total approx 10k.

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By ACDWebb
17th Apr 2014 08:47

Looks ok using round years

and even ignoring the renovations, which may or may not be capital and allowable.

Gain £100k

PPR 100k x (18 + 1.5)/25 = £78k

Gain after PPR £22k

Letting relief lesser of

£40kGain re letting - 100k x 7/25 = £28kNet gain £22k

Which would seem to leave Nil assessable

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By grahamstone1
17th Apr 2014 11:39

Thanks. I was sure it would be nil assessable but just needed to be doubly sure. Your calcs seem to more or less agree with mine. ( I didn't round up years ).

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