If you sell a property which is your only or main residence or has been at some point during your period of ownership, Private Residence Relief (“PRR”) will be available. This means that if a capital gain arises on the sale, PRR will exempt either all or part of the gain from Capital Gains Tax (“CGT”). If you have more than one private residence, you can make an election to nominate one of your residences as your PRR. Please see our previous blogs for further details. However, one point that taxpayers may not be aware of is that a rented property can class as a residence for the purposes of PRR. This is because if you have an ‘interest’ in a property, which includes any legal or equitable interest from being the owner of t...

The division of marital assets is a difficult time for most couples undergoing separation/divorce/dissolution, and little thought may be given to the potential tax implications that can arise. This article seeks to highlight some of these tax issues, and potential planning to help mitigate the potential tax charges and ensure that a larger pool of assets remains for apportionment between the parties. Capital Gains - Tax Year of Separation The transfer of assets between spouses/civil partners who are 'living together' in the tax year, is at no gain/no loss for capital gains tax. Individuals will be treated as living together unless they are separated under a Court Order or formal Deed of Separation, or they are separated in circumstanc...

In the recent case of Crippin v HMRC [2021], the taxpayer (Mr Crippin) was successful in his First Tier Tribunal appeal in relation to claiming Private Residence Relief “PRR” on an annex. This blog will discuss this case and its relevance for those who may be disposing of similar assets. Background In 2006, Mr Crippin purchased a house named ‘Loaningdale’ and an adjacent annex named ‘Bothy’ for him and his family. Mr Crippin and his partner were not married. In 2009, Mr Crippin submitted a planning application to construct an ancillary accommodation above Bothy (and the double garage attached to Bothy). This was named ‘Benko,’ and this eventually became a three-bedroom flat with a kitchen/living area and bathroo...

With an ever-increasing demand for housing and a limited amount of land available, you may be considering whether a property could be built in your garden. Clearly, this could be very financially rewarding for you; however, there are some important tax considerations that you should bear in mind. This article will consider the potential capital gains tax and income tax implications of 1) selling part of your garden to a property developer, 2) self-building a property in your garden for onward sale and 3) self-building a property in your garden to let to tenants. 1)Selling part of your garden to a property developer If you sell part of your garden to a property developer who will develop the land and later sell the developed proper...

Private Residence Relief (“PRR”) provides a relief from Capital Gains Tax (“CGT”) on the sale of a property which is or has been your only or main residence at some point during your period of ownership. Generally, if the property was your only or main residence for part of your ownership, only this part is relieved from CGT (in addition to the last 9 months of ownership which is treated as ‘deemed occupation’ in any case). However, there are also some specific instances where an absence from your only or main residence may still be eligible for PRR. Call us now on 0113 887 8432 to check which periods of your ownership are eligible for PRR and make sure you are claiming your maximum entitlement. Absences from a prop...

If you sell a property which is your only or main residence or has been at some point during your period of ownership, Private Residence Relief (“PRR”) will be available to exempt either all or part of the capital gains that arise on the sale of the property. Please see my previous articles for more details of this relief in general,  and how it can be calculated and claimed. In particular, there are specific rules that married couples and couples who are getting divorced should be aware of and this article will focus on these specific areas. Call us us on 0113 887 8432 now to chat through your circumstances. PRR and Married Couples PRR Election Where a married couple are living together, they can only have one qualifyin...

With more and more people currently working from home and being given the option to do so on a permanent basis, the idea of converting your spare room into a dream office to be used solely for work purposes may seem very appealing. However, you should be aware of the impact that this could have on your Capital Gains Tax (“CGT”) liability when you sell your property. This is because Private Residence Relief (“PRR”) is restricted if a room or area of a property is used exclusively for business purposes, i.e. for a trade, business, profession or vocation (with no private use at all). Call us us on 0113 887 8432 now if you want to understand whether this applies to you.  In summary, you will not be required to pay CGT if you sell...

Only/Main Residences If you sell a property which is your only residence and has been your only home throughout your period of ownership, you will not be required to pay Capital Gains Tax ("CGT") if a capital gain arises on the disposal. This is because Private Residence Relief ("PRR') is available for the full period of ownership, reducing any chargeable capital gains to nil. This also applies if you own several residences and have elected for one to be your main residence for PRR purposes (please see our previous article Principle Private Residence "PRR" Elections: Your Options for further details of this). Call us us on 0113 887 8432 now to find out if you are eligible for PRR.  Additional Residences Furthermore, if yo...

What is Principle Private Residence “PPR” Relief? If you sell a property which is your only or main residence or has been at some point during your period of ownership, Principle Private Residence (“PPR”) Relief will be available. This means that if a capital gain arises on the sale, PPR will exempt either all or part of the gain from Capital Gains Tax (“CGT”). Call us us on 0113 887 8432 now to discuss your circumstances.  PPR elections for individuals with more than one residence   If you have more than one private residence, you can make an election to nominate one of your residences as your PPR. This election must be made within two years of the date that you have a new combination of residences; for example, ...

Private residence relief (PRR) provides relief from capital gains tax (CGT) on the disposal of a property that has been used as your main home during the period of  ownership. In the recent First Tier Tribunal (FTT) case of Hashmi v HMRC, the tribunal found that Mrs Hashmi (the taxpayer) had failed to satisfy the burden of proof required to show that the properties that she lived in were her private residences, and therefore eligible for private residence relief. The case provides insight into the level of proof that is required to support a claim for private residence relief for a property. Background Between 2013 and 2015, the taxpayer lived in the following properties, for the following periods:  132 Shaggy Calf Lane unt...