CGT on former PPR

Dec 28, 2006 1 Replies

Rate this thread:

I've been reading through the various posts on this and have a basic understanding of exemption rules for PPR and the last 3 years being exempt if a property was at any point during ownership the PPR. I also think I understand the residential letting limit of £40,000 if a property that has been the PPR has gone on to be let. However, could someone tell me what the rule is for periods of unoccupation after a property ceases to be PPR, but before it is either sold or rented? For example, say a house was bought in 2000 and was PPR until 2005, then empty until 2007 and the rented until perhaps 2010?

Thanks

James

There is no relief for periods of non-occupation other than by way of the three-year rule. In your example, no Letting Relief is available during the last 3 years because PRR is already available, and this is not restricted as a result of the letting. So you can't just say that you'd get 5 years of "real" PRR plus 3 years of "36 month rule" PRR plus 3 years of LR, makes 11, which is more than 10, so none of the gain is taxable. Instead it would go like this: The first 5 years qualify for "real" PRR. The next 2 years get no relief. The last 3 years would qualify either for LR or PRR but not both (and it's simpler to use the latter). So 2/10 of the gain is taxable (but don't forget Taper Relief).

CGT on former PPR

Join the Discussion

Didn't find your answer?