Lettings relief - order of letting and occupation

Any recent experience with lettings relief if the property is let prior to owner occupation?

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I have been looking into the availability of lettings relief in circumstances where the individuals buys the property, lets it out, and then occupies it as his only or main residence.  I haven't found anything to suggest that lettings relief wouldn't be available in this scenario, although all of the guidance I have found (including the examples in HMRC CGT manuals at CG64737) anticipate that the occupation period would be before the lettings period.  I also understand that the intention of the relief was to apply to properties let out subsequent to occupation (based on an old accountingweb question thread).  If anyone has any experience on this point I'd be interested to hear it.

thanks

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By Ruddles
27th Feb 2017 10:34

Forget HMRC guidance and stick to the legislation - it is crystal-clear.

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By Accountant A
27th Feb 2017 16:47

Helenrs wrote:

I have been looking into the availability of lettings relief in circumstances where the individuals buys the property, lets it out, and then occupies it as his only or main residence. 

S224(3) TCGA? "... if the acquisition of, or of the interest in, the dwelling-house or the part of a dwelling-house was made wholly or partly for the purpose of realising a gain from the disposal of it ..."

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Replying to Accountant A:
By Ruddles
27th Feb 2017 16:53

What part of the question makes you think that s224 might be in point?

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Replying to Ruddles:
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By Accountant A
27th Feb 2017 17:23

Ruddles wrote:

What part of the question makes you think that s224 might be in point?

"the individuals buys the property, lets it out, and then occupies it "

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Replying to Accountant A:
By Ruddles
27th Feb 2017 18:04

So what??? What part of that statement suggests that the taxpayer purchased the property with any intention of realising a gain? (And if he did, s224 is now somewhat academic.)

All I can see is an intention to derive rental income.

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paddle steamer
By DJKL
27th Feb 2017 17:31

223.4
Where a gain to which section 222 applies accrues to any individual and the dwelling-house in question or any part of it is or has at any time in his period of ownership been wholly or partly let by him as residential accommodation, the part of the gain, if any, which (apart from this subsection) would be a chargeable gain by reason of the letting, shall be such a gain only to the extent, if any, to which it exceeds whichever is the lesser of—

(a)the part of the gain which is not a chargeable gain by virtue of the provisions of subsection (1) to (3) above or those provisions as applied by section 225; and

(b)£40,000.

222 Relief on disposal of private residence

(1)This section applies to a gain accruing to an individual so far as attributable to the disposal of, or of an interest in—

(a)a dwelling-house or part of a dwelling-house which is, or has at any time in his period of ownership been, his only or main residence,

So, any time is fine.

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By chewmac
27th Feb 2017 17:57

Agree, the last 18 months of ownership will be covered by Letting Relief as long as the taxpayer occupied the property as his home at some (any) stage, s223(2)(a).

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Replying to chewmac:
By Ruddles
27th Feb 2017 18:03

Letting Relief???

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