Most of us do not give tax a second thought when selling our homes, but Private Residence Relief (PRR) which exempts a capital gain from taxation on sale, may not always be available to cover the gain in full.
We have detailed below some of the situations which may require further discussion with us to help clarify the PRR position:
- The title covers an area greater than 1.235 acres.
- The residence is not the only property you live in, or where you have made an election on another property.
- Part of the property has been used exclusively for business purposes.
- A separate dwelling at your home is let out.
- You have moved out of the property for a period of time.
- You are concerned about the length and circumstances surrounding your occupation.
- A company owns your home.
- You are selling a residence acquired following a divorce and have made an election on your former marital home.
- You sell shares in a flat management company as part of the property sale.
- The sale follows a regular pattern of buying, occupying and selling property.
- Where an individual has moved into a care home.
- The construction or renovation process delayed your occupation for more than 24 months (Grand Design adventurers take note!).
- For trustees where the settlor used a hold over election when settling the property.
- For personal representatives of an estate who are unsure whether the occupant is a qualifying tenant.
Tax can be an important consideration when selling a home; make sure you are aware of the financial consequences.