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PPR and letting releif on sale of property

PPR and letting releif on sale of property

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My client bought 50% of a flat in July 2001 for £215,000 (her share £107,500) and lived in it until March 2008 when she moved out and rented the property.

The property was sold in October 2011 for £287,500 (her share £143,750).  leaving a potential gain of £36,250

PPR releif is available up to March 2011 as three years deemed residency so this reduces the gain to £36,250 * 7/123 = £2,063.   This is covered both by the annual allowance of £10,600, and letting relief of £40,000

Have I calculated the gain of 7monthe over 123 months correctly - the gain is pro ratered over time?

Many thanks


Replies (5)

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16th Jan 2013 14:33

Pretty much correct

The net chargeable gain is £nil - wiped out by letting relief. You don't need to go near annual exemption.

Although your figures are correct, relief is not "available up to March 11". Relief is in fact available July 01 to March 08 and Nov 08 to Oct 11. It makes no difference to the calculation in this case but important, as a pedant, to get it right.

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By kedgley
16th Jan 2013 14:43

Thank you very much for your helpful reply.


What if anything needs to be disclosed on the tax return?


Should I fill in the white space about the sale of the property as the Revenue might be expecting a capital gain on the sale of the property?



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Replying to SteveHa:
By lisler
17th Jan 2013 21:08

You do not need to report anything on the tax return

See this extract from HMRC manuals:



2003-04 and later years of assessment

An individual need not make a detailed return of chargeable gains where:

the aggregate consideration for all disposals (excluding assets which are exempt from the capital gains charge, see CG12600+, and disposals between husband and wife or between civil partners to which TCGA92/S58 applies so that neither a gain nor a loss arises on the disposal, see CG22200) does not exceed four times the annual exempt amount.andeither no allowable losses are deducted and the total chargeable gains after applying taper relief do not exceed the annual exempt amount, see CG18000+or allowable losses are deducted and the total chargeable gains before deducting losses or applying taper relief do not exceed the annual exempt amount, see CG18000+.

These conditions are reflected in the notes to the Self-Assessment return which explain when the CGT supplementary pages must be completed.

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By courty61
16th Jan 2013 16:45

Doesn't matter for this purpose but isn't letting relief the lower of:


Amount of PPR given (34,186)

Amount of gain not covered by PPR, for period when actually let (7/123 x 36,250 = 2,063)


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By ACDWebb
18th Jan 2013 08:28

Despite that

if a return is required might it not be advisable to add a white space note that the property has been sold but no CGT pages are required/included as no net gain arises after relief under TCGA s 222 & 223

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