October 07, 2016 | No Comments
Capital gains tax is not normally payable on gains you make on your only or main home, as these will qualify for private residence relief (PRR). But all or part of any gain will usually be taxable if:
- You convert or develop your home into flats
- You sell part of your garden and your total plot is over half a hectare (1.2 acres)
- Part of your home is used exclusively for business
- You let all or part of your home
- You live away (though gains relating to some absences are tax free, including the last 18 months)
- You bought or improved the home wholly or partly for the purpose of making a profit
Tax relief if you own more than one home
If you own more than one home, you can select which one will be tax free and it doesn’t have to be the home that you live in most of the time. My advice is to select the home that is expected to make the largest gain. You have 18 months from when you purchase a new home to confirm the selection.
Married couples and civil partners can have only one main home between them but unmarried couples can nominate a different home.
Tax relief if you let out your home
If you have let part or all of your home, when you sell it, a proportion of any gain will relate to the letting and could be taxable. Provided the home genuinely has been your main home at some time, you can claim tax relief for the time it was your main residence.
As ever, if you have any questions, please call Michael Burgess on 01782 279615.