Potential capital gain on a flat which was partially let

by **Nad2012** on Sat Jan 07, 2012 4:45 am

Hi ... thanks for considering this ... I would like advice as to whether I have CGT to pay (if any) on the disposal of my flat.

Here are the key facts:

Purchased a 2 bedroom flat in Feb 2007

Feb 2007 - Jan 2008 - I lived in the flat but received rent from my girlfriend and another friend who lived there with me.
Jan 2008 - Feb 2010 - The flat was FULLY let out to tenants and I was renting and living in another flat elsewhere.
Feb 2010 - Jun 2010 - I moved back into my flat with my girlfriend (and received rent from her).
Jun 2010 - Sept 2010 - I lived in the flat by myself.

Sold the flat in Sept 2010.

Other facts:

During the approximate 44 months I have owned the flat, I have not owned any other property/flat i.e. this was the only home I owned and during the period I was not living there I was simply renting another flat (i.e. Jan 2008 Feb 2010).

I have completed income tax returns for the past 4 years and naturally declared and paid tax on all rental income (incl. the lodger style income received from my girlfriend and friend).

The capital gain over the full 44 months of ownership is approximately 36k.

So, can something please advise what if any of this is taxable under CGT rules, after allowing for Private Residence Relief and/or Letting Relief?

Many thanks.

by **Peter D** on Sat Jan 07, 2012 6:44 am

Due to PPR and Letting relief there will be no CGT. Read HS283 on the HMRC web site.Why you declared your girlfriends rent when this was probably just a contribution I do not know and your friend probably came under the Rent a Room Scheme as far as IT is concerned. Regards Peter

by **Nad2012** on Tue Jan 10, 2012 1:46 am

Thanks Peter.

The friend's rent exceeded the 4250 max under the Rent a Room scheme (rent in central London isn't cheap...)

Re the CGT and your comment re there being none ... thanks. I did look at info HS283 before I put the post up ... however the maths confused me a bit e.g. 36 months can be ignored and then the other 8 months were a bit confusing (being partially let).

Are you able to help with the actual maths so I can complete my workpapers for the return (i.e particularly the 8 month period and how letting relief works)??

Thanks very much in advance.

by **King_Maker** on Wed Jan 11, 2012 9:38 am

As the flat qualifies for PPR, the 36 month exemption rule applies.

This means there is no CGT.

by **Nad2012** on Fri Jan 13, 2012 5:47 am

Thanks but as above - there is an additional 8 months period to consider ie the flat was held for 44 months in total. Please help. Thanks.

by **mullet** on Fri Jan 13, 2012 9:19 am

Private residence relief is not just based on the final 3 years; the point is that the final 3 years are treated as residence regardless, as long as the property has at some time been the owner's only or main residence.

So if the flat was truly your only or main residence from Feb 2007 to Jan 2008, that year attracts relief. Then the period from Feb 2008 to Sep 2010 is less than 3 years, so that full period is covered by PRR.

Remember that you still have to report this disposal in your 2010-11 tax return.

by **King_Maker** on Sun Jan 15, 2012 12:35 pm

Nad2012 wrote:Thanks but as above - there is an additional 8 months period to consider ie the flat was held for 44 months in total. Please help. Thanks.

No need to consider it - you already have 100% PPR exemption.