Chapter 22 PPR relief – further aspects Flashcards
Lettings relief
Lettings relief – available when the dwelling house has been let as residential accommodation during a period of absence. PPR will take priority over this though. Lettings relief is the lowest of three numbers:
• Lettings relief can never exceed the amount of PPR relief
• Lettings relief cannot be more than the gain arsing during the period of absence when the property was let out
• The maximum amount is £40,000
Letting relief cannot turn a gain into a loss.
Unable to reoccupy property – usually if an individual does not return to the property, the deemed occupation rules do not apply. However, if an individual is unable to reoccupy the property due to employment requiring them to work elsewhere, the period of absence can be treated as a period of deemed occupation.
more than one residence and spouses
More than one residence – if no action is taken HMRC will determine which of the properties is treated as the principal private residence for CGT purposes. However, a taxpayer can election which property is their main residence, this election must take place within two years of the date they had the two residences. A taxpayer can only have one PPR at any time, since the last 18 months are always exempt, if a taxpayer purchases a second residence and treats it as their PPR, as long as the first property is sold within 18 months, they are both exempt.
Spouses – when spouses live together, they can only have one qualifying PPR between them, an unmarried couple can have a property each qualify for PPR though.
