You lived in the whole property for two years before letting it out. You’ll be able to get relief on the time you lived there, plus nine months after you move out. You’ll get Private Residence relief for the 33 months (46 per cent of the time) you lived in the property.
7.5 years
You’re entitled to Private Residence Relief for 7.5 years (6 years of residence plus the final 18 months) out of 13 years. This part of the gain is £86,539 ((7.5÷13) x £150,000). Your remaining gain is £63,461.
How do you calculate lettings relief?
In a simple case where, for example, the property is lived in for a number of years and then let out a residential accommodation, the amount of private residence relief is determined by apportioning the gain by reference to the period it was used as the taxpayer’s main residence.
Are there new restrictions on private residence relief?
Details of new HMRC restrictions on private residence relief Monday, 01 April 2019 HMRC has launched a consultation on changes to private residence relief (PRR) from capital gains tax (CGT) that were announced at Budget 2018. As from 6 April 2020, lettings relief will be restricted to owners who share occupancy with a tenant.
What is the formula for private residence relief?
Calculating Private Residence Relief. Tax rules lay out a formula for PRR if the seller has only lived in the property as their home for part of the time of ownership. The formula is: The formula is: Total gain (£) x Period of occupation. Total period of ownership.
When to apply for principal private residence ( PPR ) relief?
This means that of the 217-month period of ownership, 129 months (120 when Bill lived in the property as his main residence plus the final 9 months) will qualify for PPR relief. This reduces the chargeable gain by £118,894 to £81,106.
When to apply for lettings relief for long term residents?
This period is extended to 36 months in certain circumstances, for example when a person is a long term resident in a care home. Lettings relief is available where PRR is restricted when all or part of a residence has been let as residential accommodation.
