Captial Gains Tax: Deemed occupation

alp_1685

Hello 

I have a question regarding CGT. I own a property that I currently rent out. It is my sole property, I am living in rental accommodation myself. I lived in the property for 2 years before relocating for work. I have been renting out the property for just under 2.5 years and am thinking of selling within the next 6 months. I am considering moving back into the property and making it my primary residence for a brief period prior to sale, to be eligible for full CGT relief. I have a couple of questions regarding this:

1. Is there a minimum amount of time I need to have been living back at the property to qualify for relief?
2. What do I need to do to ensure the property will count as my primary residence? I plan to put myself back on the electoral register and changed my address with banks etc, is this likely to be sufficient?
3. I understand that, to qualify, I must not have invested in any other property during this time. I have been renting the entire time I have been absent from the property and own no other property, does this mean I meet this condition?

So grateful for any advice!

Jeremy535897

The rules on absences are covered in:
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2021

Is it your intention to keep renting the property you are currently living in? You should make an election for the house you own to be your main residence throughout, as no gain can arise on the rental property. This is also discussed in the helpsheet.

Grumpy_chap

I am not sure that the OP can avail the relief for the entire period of the time living elsewhere in the rental property.

It hinges on the correct interpretation of "living in job related accommodation".

I understand that "job related accommodation" would be, for example, a school caretaker living in the property on the school grounds as a requirement of employment.

AIUI, an individual living in, say, Birmingham, who rents a property in, say, Manchester, the property in Manchester does not simply become "job related accommodation" because the reason for moving was to take a job.

Jeremy535897

HS283 says:

"The qualifying periods of absence are:

a. absences, for whatever reason, totalling not more than 3 years in all
b. absences during which you’re in employment and all your duties are carried on outside the UK
c. those absences totalling not more than 4 years when either:

• the distance from your place of work prevents you living at home
• your employer requires you to work away from home in order to do your job effectively

You will keep the exemption for absences b and c if you cannot return to your dwelling house afterwards because your existing job requires you to work away again. The absences at b and c will also apply if the employment was that of your spouse or civil partner."

It may well be OP meets both a (assuming a return to the property as OP suggests) and the first part of c.

alp_1685

Thanks both, really helpful. Yes, I am hoping to keep within the 3 year period to qualify for a. I will be moving back into the property for at least a month prior to sale, and will make sure to register the property I own as my primary residence for this period.

This forum is such an amazing resource!