CAPITAL GAINS TAX - Private Residence Relief
Where a person sells the property that forms his or her main place of residence, there is no Capital Gains Tax payable on the gain in value since the time when the property was first acquired by that person. This relief is generally known as the Principal Private Residence relief and applies to any period of ownership during which the owner was in actual occupation.
Where the person is no longer living in the property, this relief is available for a final period in any event. Up to and including 05 April 2014, the final three years of ownership are treated as a period of residence and will qualify for the relief, even though the owner may not be occupying the property during that time.
From 06 April 2014, this final period is being halved and reduced to eighteen months in most cases. However, where a person is moving into a residential care home, the final period qualifying for this relief in any event will remain at three years.
The date on which the property is treated as having been disposed of for Capital Gains Tax purposes is the date on which contracts for the sale and purchase of the property are exchanged unconditionally, rather than the completion date. Where therefore a property currently in the process of being sold has not been occupied by the owner as his or her main place of residence for over eighteen months but less than three years, it will clearly be advantageous for contracts for the sale and purchase to be exchanged before the end of the current financial year.
For more information or advice, please contact Andrew Miller, Consultant at Gullands Solicitors, at firstname.lastname@example.org