Capital Gains Tax - do I qualify for partial Private Residence Relief?

Tractorboyt43

First of all, a big thank you to any forum members who are kind enough to take the time to reply to this post. If I have missed any information please let me know and I will do my best to provide it.

I have a question regarding Private Residence Relief and whether I can claim a partial amount in relation to a Capital Gains Tax return I am trying to sort out for submission to HMRC as I can’t seem to find a definitive answer or fully understand the guidance.

The back story is that in 1998 the ownership of the house my father owned and lived in was fully transferred over to me (gifted I guess) to protect my interests as a result of a new lady moving in with him. He continued to live in the property with a ‘lease for life’ arrangement. I lived with my ex-wife in another property which we owned jointly at the time. 

In 2006 my marriage broke down and I left our home and went to live with my father for a period of almost two years before I then bought a property in my own name following the divorce. Last year my father passed away and the sale of the property was completed just over a week ago. 

I’m now putting together the CGT return which needs to be paid by the end of the month. At the present time I’ve calculated a total gain of roughly £109k which will mean a CGT bill of nearly £24k. If, however, I can claim for PRR for the 22 months I lived in the property, which was my main home at the time, it would mean I could save roughly £2.5k. 

Am I able to claim partial PRR given these circumstances? 

On a side issue I note that there is some mention of adding the last 18 months for the PRR calculation but I’m unclear if this is something I can do? (assuming I can claim for PRR anyway??) and would save me another £2k.

Any clarification/guidance would be greatly appreciated.

Jeremy535897

It sounds as if the house was your main residence for 22 months, so you can treat that part of the gain, plus the last 9 (not 18 for sales after 5 April 2020) months of ownership, as exempt. You have owned the property since 1998, say 270 months. 22/270 of the gain will be exempt (you can adjust to actual months).

You will have to report the sale and pay the tax within 30 days of completion:
https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax