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Rental query
Comments
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no you retain your PRR because you continue to be its ownerMany thanks for the advice - I lived in it for 12 years but have let it out for the last 3 years.........have I lost my PRR then? (and it's mortgage free BTW)
you only lose your PRR if you cease to be an owner, as I mentioned in the post you quote
the key point when married and adding a spouse to ownership of a property is that you must carefully review who has a claim to PRR and who does not, as it should be a factor in your decision
to claim PRR you must have lived in the property as your main home whilst also an owner. A spouse cannot inherit a claim to PRR from their other half, the spouse must have lived in the property themselves whilst owning it as their main residence.
once an owner moves out, and for example, the property is let, then the owner retains their claim to PRR and also can claim letting relief. But if there is no claim to PRR then you cannot claim LR. Hence it is vital to ensure that a spouse taking on ownership does not "cost" the other person a large amount of extra CGT because the spouse cannot claim PRR and LR in their own right. I am sure you are smart enough to see that there will be a break point where the real values mean a few £ of income tax saved on a few years rent is nothing if x% of the property's gain is subject to unrelieved CGT because it is owned by a spouse with no claim.
read this to see the mechanics of CGT, PRR, and LR
https://forums.moneysavingexpert.com/showpost.php?p=73621764&postcount=20
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