Private Residence Relief (PRR)

If a property was continuously occupied as a main residence, it is exempt from Capital Gains Tax (CGT) when it is sold.

There are also certain absences that are treated as ‘deemed occupation’ and do not trigger CGT. This is when the owner is physically absent yet is treated as if living there for the purposes of the relief, as long as the period of absence is preceded and followed by actual, physical occupation.

The last 9 months of ownership are always treated as deemed occupation, regardless of whether or not the owner is present, provided that the owner has occupied the property at some point throughout the period of ownership.

Letting Relief

An owner who lived in a property at the same time as tenants may qualify for Letting Relief on gains made when the property is sold.

The relief is the lowest of the following:

  • the same amount received in Private Residence Relief
  • £40,000
  • the same amount as the chargeable gain made whilst letting out part of the property

Mark Davies & Associates can advise on reliefs and associated compliance as well as tax efficient structures for holding UK property.

Contact us here for more information.

About Us

BA (Hons), CTA
Managing Tax Partner