I've just been checking the HMRC calculator for NRCGT to make sure it agrees with my figures and I note it deducts the £12k annual exemption in computing the taxable gain before it allows Letting Relief to be entered. It does this for all 3 options. Surely this is wrong. The taxpayer might well wish to use the exemption on another disposal. If his Letting Relief reduces the taxable gain to less than £12k, why should he have to use up his whole allowance on that asset?
Is this yet another example of HMRC messing it up (or trying it on) or have I missed something here? I know Letting Relief will soon only become available to Rigsby and his like, but have they subordinated it to the annual exemption as well? Must have missed that announcement if they have.
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I had issues with the NRCGT calculator. I don't have time to look at but an earlier post had useful links which gave me my answer. My query was regarding the last 18 months and lettings relief but it may have other info in the links.
By Expat24
09th Sep 2017 17:49
The HMRC calculator is wrong with its treatment of PRR - so tread carefully! It merrily gives the last 18 months as exempt even if no exemption occurs after 5/4/15.
Update on this. Apparently CG64943 states that S223(7) TCGA92 only limits the period of ownership for the purposes of S223, not for S222. It goes on to say that a gain falls within S222 if the property has been used as the owner's main residence at any time in the period of ownership defined by S222(7) and that if the gain falls within S222 then S223(2) allows relief for the final period of ownership.
So according to HMRC, "based on this it is correct that when using the rebasing method where the property has not been used as the main residence after 05/04/2015 private residence relief will still be due for the final period exemption, however as you know, the calculation should not be adding on any days from before 05/04/2015".