The three year relief rule?

[deshg]

Hello everyone, I have a couple of more questions(!) with regard to CGT that I would really appreciate any pointers on. This is with regard to the last 3 years worth of relief that is given on all main residences.

I lived in a rented house for a year as a student and then bought it off my landlord and continued to live in it with three of my mates as lodgers for our final year at uni. I put it on the market and rented it out and sold it 2 months after that tenancy started, meaning I owned for about 14 months in total (lived in it with friends for 12 of those 14 months, rented it fully to others for the last 2).

My question is, given it was my main residence for some of the ownership period and I owned it for less than 3 years, does that give me full CGT exemption, despite the fact some of the gain would normally (outside the last 3 years) be attributable to the let part of the property and hence liable for CGT.

If that is true then does it mean that effectively if you buy a house, that you genuinely use as your main residence at some point, and sell it within 3 years then you will not be liable for CGT whatever rental arrangements occur within your period of ownership as they inevitably fall within the last 3 years (as long as it was your main residence at some point)?

I would really appreciate any guidance that anyone could give me on this? Thanks very much once again,

Dave

[Tax Accountant]

Hello everyone, I have a couple of more questions(!) with regard to CGT that I would really appreciate any pointers on. This is with regard to the last 3 years worth of relief that is given on all main residences.

I lived in a rented house for a year as a student and then bought it off my landlord and continued to live in it with three of my mates as lodgers for our final year at uni. I put it on the market and rented it out and sold it 2 months after that tenancy started, meaning I owned for about 14 months in total (lived in it with friends for 12 of those 14 months, rented it fully to others for the last 2).

My question is, given it was my main residence for some of the ownership period and I owned it for less than 3 years, does that give me full CGT exemption, despite the fact some of the gain would normally (outside the last 3 years) be attributable to the let part of the property and hence liable for CGT.

If that is true then does it mean that effectively if you buy a house, that you genuinely use as your main residence at some point, and sell it within 3 years then you will not be liable for CGT whatever rental arrangements occur within your period of ownership as they inevitably fall within the last 3 years (as long as it was your main residence at some point)?

I would really appreciate any guidance that anyone could give me on this? Thanks very much once again,

Dave

I consider that your gain is fully covered by PPR relief.

The law states that final three years of ownership is a qualifying absence (ie deemed to be your residence) provided the property was your 'only or main residence' at ANYTIME in your ownership.

Additionally, if the residence was ALSO let as residential accommodation at anytime in your ownership, you would be entitled to letting relief to eliminate or reduce any chargeable gains not otherwise covered by PPR relief.

If you let furnished rooms in your residence, eg to lodgers, you could claim 'rent a room' relief to cover all rents received of upto £4,250.

Ramnik

Ramnik