CGT 28 Private Residence Relief

Question 1

How does it work if you’re eligible?

Answer 1

If a taxpayer sells their only or main residence, PRR may exempt all or part of the gain arising.

Question 2

Define a private residence

Answer 2

The term private residence means a dwelling house and includes any relevant buildings within the curtilage of the main house. The relief also covers a garden of up to half a
hectare (including the site of the house), or larger if required for reasonable enjoyment of the property.

Question 3

The amount of the relief available is:

Answer 3

Gain × Period of occupation of property/Period of ownership

Question 4

What are the periods of deemed occupation

Answer 4

• last nine months ownership regardless
• any period when employed abroad;
• up to four years when working away from home (this includes self-employment);
• up to three years for any reason.

Remember to check that the taxpayer did reoccupy the house

Question 5

Unable to reoccupy?

Answer 5

If a taxpayer is prevented from reoccupying their home as a result of the terms of their employment, then the requirement to reoccupy the residence in order to ensure the absence qualifies as deemed occupation will be ignored.

Question 6

If a taxpayer acquires a house as their main residence but is unable to occupy it immediately, in order to carry out construction/renovation/alteration/redecoration, or to
dispose of their existing residence

Answer 6

this ‘period of absence’ is treated as occupation provided it does not exceed 24 months.

Question 7

There must be an assumption of……

Answer 7

permanence and a degree and expectation of continuity
in order to turn mere occupation into residence.