UK Capital Gains Main Residence

[prose1966]

A Client has property A. He uses part of the land from property A to build property B.
He moves into property B as soon as built with the intention of living there permanently.

However because of the ill health of the Parents of the Client he buys a property C with his Parents and moves it this.

The period of residence of property A was 4 years, property B one year after which there was rental income for several months before the sale.

I believe the client can claim Principle Main Residence relief on property B please can someone confirm.

 

[Becky]

Hi prose, welcome to the forums

I'm a bit rusty on PPR, but I believe you are right. Any property which has been used by the owner as their main residence for a period of time (no matter how short) may qualify for relief. Assuming this is the case, then the last 36 months is covered by PPR relief even if not the main residence during that time.

Here is the HMRC manuals on the topic - the 'Computation of relief' section should be particularly helpful to you.

CG64200c - CAPITAL GAINS MANUAL: Contents

 

[Truemanbrown]

A Client has property A. He uses part of the land from property A to build property B.
He moves into property B as soon as built with the intention of living there permanently.

However because of the ill health of the Parents of the Client he buys a property C with his Parents and moves it this.

The period of residence of property A was 4 years, property B one year after which there was rental income for several months before the sale.

I believe the client can claim Principle Main Residence relief on property B please can someone confirm.

Basically, you should be able to live at Property B for just one day before you could claim private principal residence on that property. However, HMRC have been challenging these claims (i.e. Moore V HMRC and Metcalfe V HMRC) so make sure that you have evidence of residence such as utility bills etc.