CGT/House sale/part time B&B/lettings relief

Various options to avoid CGT on house sale. Can I submit preferred option to hmrc for pre approval?

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Hello
 I ran a small part time B&B continually during 25% of time of ownership of my PPR using 25% of the house area (2 bedrooms). I started the b&b 3 years after moving into a bog standard house (no annexes) and always lived in the dwelling. 
I believed I have a CGT liability due to restricted PPRR of 6.25% (25% x 25%) of the total gain. I also believe I qualify for lettings relief under the new rules, but I also have a large capital gains loss from previous years too. Before I do my 23/24 tax return, can I write to HMRC now with a calculation claiming lettings relief so that if they disallow it I can still use my CGT losses as a back up plan. Or should I submit both options to HMRC now and ask them, which one they will accept. Or can I wait submit my return in  04/24 claiming lettings relief and if required resubmit an amended return and claim the CGT loss instead? But then what if  HMRC reject the lettings relief claim after I have lost the right to amend my tax return. 
Many thanks

Replies (11)

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By bernard michael
28th Feb 2024 09:22

Your first problem is waiting for a reply to your letter, which may never come

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By Leywood
28th Feb 2024 09:31

Masquedefer wrote:

. Or should I submit both options to HMRC now and ask them, which one they will accept.

I’ve never heard of anything so bonkers.

BTW, this forum is not a free tax helpline.

Ask your Accountant. If you haven’t got one then type into google ‘find an accountant’ followed by either ICAEw or ACCA

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Replying to Leywood:
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By Tax Dragon
28th Feb 2024 09:48

Or 'Find a tax adviser' followed by CIOT or ATT.

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Replying to Tax Dragon:
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By Leywood
28th Feb 2024 09:51

Good point. I will add them to the next list.

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Replying to Tax Dragon:
By JCresswellTax
28th Feb 2024 10:08

This is much better advice.

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By Masquedefer
28th Feb 2024 09:38

Good point. Assuming then I claim lettings relief but hmrc then reject it after I have lost the right to amend my SA return, that would seem inequitable that I cannot then use my capital gains loss. Perhaps I should just use my capital gains loss now?

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Replying to Masquedefer:
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By Leywood
28th Feb 2024 09:40

A question for your Accountant. As I said.

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Replying to Masquedefer:
By JCresswellTax
28th Feb 2024 10:09

This is complicated stuff. You should not try and do this yourself with help from an internet forum. Pay for advice from a professional.

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Replying to Masquedefer:
RLI
By lionofludesch
28th Feb 2024 11:16

Aren't CGT losses automatic?

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By AlgernonB
28th Feb 2024 14:02

Give HMRC alternatives, and they will opt for the one with the highest tax bill. Given HMRC's typical response times, you are unlikely to get a response to a letter within anything like the tax return deadline. You also have a 60 day window for informing HMRC of the disposal of a let property, even if only partly let, part of the time. See a tax advisor soon.

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By FactChecker
28th Feb 2024 16:18

"Can I submit preferred option to hmrc for pre approval?" ...
"Or should I submit both options to HMRC now and ask them, which one they will accept?"

OP, you seem to be labouring under a rather basic misapprehension regarding your relationship with HMRC. Despite them sometimes referring to you as "a customer", they are not providing you with an advisory service - and have no interest (let alone any inclination) in running multiple calculation scenarios for you.

Ultimately you are responsible for what you put in which returns to HMRC - and they have the right to accept this or of course to query it (potentially years later).
If you wish to model different scenarios (and indeed check which are actually validly available to you), then your choice is between DiY or paid-for professional advice.

Which is what others have said in fewer words.

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