• Alex Howard

More than one home – Which one qualifies for private residence relief

Private residence relief removes the charge to capital gains tax on the taxpayer’s only or main residence.

For the purposes of the relief, a taxpayer can generally only have one residence qualifying for the relief at any one time, subject to the final period exemption for properties which have been the only or main residence at some time, set at nine months from 6 April 2020 (unless the taxpayer goes into care, in which case the final 36 months count).

Married couples and civil partners can only have one main residence between them.


More than one residence

Where a taxpayer has more than one residence, they can nominate which of them counts as the main residence for the capital gains tax purposes. However, to be nominated, the property must be lived in as a ‘residence’ – a property which is let out cannot be nominated.

The nomination must be made within two years of the date on which the particular combination of residences changes. If a nomination is not made, which property qualifies as the main residence for capital gains tax purposes will be determined in accordance with the facts.


Example

Bertie has lived in a cottage in Shropshire since December 2012. In October 2019 he starts a new job in London, buying a flat in January 2020 to live in during the week. He has until January 2022 to nominate which of his residences is his main residence for capital gains tax purposes.


Getting married

Where a couple marry or enter into a civil partnership and each partner owned a residence which the couple continue to use after the date of their marriage of civil partnership, they must nominate which residence is their joint main residence as married couples and civil partners can only have one main residence between them. The nomination must be made within two years of the date of their marriage or civil partnership.

However, unmarried couples can each have their own main residence.


Want to know more or speak to us?

If you have any questions on this topic or are considering a change of Accountants, please give us a call as we would love to talk to you.

2 views

Recent Posts

See All

Company car mileage rates update

The company car benefit tax charge does not cover fuel provided for a company vehicle. This means that where an employer pays for all fuel (business and private), a statutory fuel scale benefit charge

Howards Accountants is a trading name of Howards Business Services Ltd. Howards Business Services Ltd is registered in England and Wales under Company number 10849750 and the registered office is at Suite 17, Camborne Business Centre, Weeth Lane, Camborne, Cornwall, England, TR14 7DB.

  • Facebook Clean
  • Twitter Clean

© 2019 Howards Business Services Ltd

Alex Howard is licensed and regulated by AAT under licence number 1002975.