Property

[JasonButcher]

I converted my Principal Private residence in to four flats. Which I rented out.
I am now selling the four flats.
My accountant has worked out the CGT but has not included letting relief.
Is this correct because on the Inland Revenue web page it states -

CG65266 - Private residence relief: realising gain: conversion into flats.

A measure of relief will be due on each flat which formed part of the owners residence when the property was a single undivided dwelling house. Similarly a measure of relief under Section 223(4) may be due on any such flat which has been let before sale, see CG64710+.

This would appear that I can get the relief - am I correct or is my accountant correct.

Thanks in advance

[ahagyard]

I think your accountant has got it right this time.

The Inland REvenue regard a conversion of a house into flats as essentially a new property. The value of the unconverted house qualifies for the main residence exemption.

However, as you have not occupied the flats as your main residence then letting relief will not be due. The answer would be different if you live in one of the flats for a period prior to being let/sold.

Regards

Andrew Hagyard
ahagyard@cta.org.uk