Elderly clients have bought a flat and will move in shortly, still need to sell existing property (house) which have lived in for over 40 years. Given the state of the housing market and the fact house needs work it may be a while before they can sell. Can anyone point me to more detailed guidance on elections for principal private residence relief in circumstances like this? I thought I had read somewhere that where a house was up for sale there was a year's grace before an election was necessary but can only find fairly general guidance on HMRC website. The house has not been rented out or used for business purposes. There are separate issues about possible separate sale of the garden but I have guidance on that.
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What election?
If they move into the flat, it will become their residence and assuming that they have moved out of the house, that will cease to be their residence. No election is required or even, possible.
The last 3 years of ownership of a property that has been a main residence is treated as still being their residence even though they are no longer living there and indeed, tenants might be living there. They will still be entitled to the total exemption from CGT if they sell the house within 3 years of moving to the flat.