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PRR, sale of property, living in Job accommodation

Is client eligible for Full PRR when living in work accommodation if spouse also owns a property?

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My client, Jane, has owned a house since 2004 which she lived in until 2009 when she met and married her husband, John. John is a manager of a pub and he has to live on the premises. Since 2009 Jane has lived at the pub with her husband. She also works part-time at the pub. HMRC have agreed that the manager is required to live at the premises in “job related accommodation.”

Jane is now looking to sell her house which is 100% in her name. John also owns a property in his name. They both let their properties out. The intention was to live in Jane’s house when they retire in a couple of year’s time; however they have now decided to live in Johns.

I’m struggling to work out if the sale of Jane’s house would be eligible for 100% Private Residence Relief for the whole 15 years of ownership. Looking at HMRC guidelines I think if Jane was single she would qualify however the fact that she’s married and they each own a property is complicating the issue.

Any help /guidance would be appreciated, thanks.

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By RetiredTax
12th Jul 2019 13:54

After a fairly quick look at this ~
Looking at the legislation and HMRC guidance at CG64555, the suggestion is that she could be eligible for (full) relief based on her husband's job related accommodation (assuming his particular job itself qualifies ~ I have not checked but suspect it does).
There is however the additional requirement of the "intention" to occupy her property again thereafter, and I wonder what (evidence) your client has to back this up. The fact that her husband owns a property (to which they now intend to reside i.d.c.) may cloud the issue somewhat, and HMRC may question any 100% claim. I suspect the relief, from the job related aspect, for her property will in any event cease from the time that intent change/decision was taken. Certainly not as straight forward as it first appears. Looks like a much considered "white space" entry would be advisable.
I hope this helps

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