How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask taxadvisor.uk Your Own Question
taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5027
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
54961312
Type Your Tax Question Here...
taxadvisor.uk is online now

My partner and I are having two houses built on a plot of

Resolved Question:

My partner and I are having two houses built on a plot of land she owns which is about a third of an acre in size. We are planning to move into one of the houses and put her mum and dad in the second, we are under the impression that we can claim Private residence relief on both properties as we live in rented accommodation ourselves as does her mum and dad, her mum has also had a stroke and requires care. If this is the case, how long do we have to live in either property before we can sell or rent them out without being liable for capital gains tax.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.

Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your question..

You can claim private residence relief on property that is your only and main residence. It is your intention to build two houses and move into one of them and make it your main residence. This property would qualify for private residence relief when you sell it in the future.

If you were to move into one and then say in two years moved out and made the second property your main residence, then both properties would qualify for partial private residence relief ( basically the period used as main residence and final 18 months of ownership plus letting relief).

You could not move into one property and put mum and dad in the second property and claim private residence relief on both as you can only have one main residence at any point of time.

More information on private residence relief can be found here

https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 1 year ago.
Would it not make any difference as her mum is a dependant due to care needed and if not, how much is partial residence relief.
Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your reply.

It would make no difference whether mum is a dependant due to care needs. There was relief available in the old day and it stopped for any residence acquired after 5 Apr 1988 (page 7 of HS283 attached).

Let me explain what I mean by partial residence relief.

You move into property A on completion and make it your main residence.

Mum and dad move into property B .

You live in property A for say 3 years and then change residence to property B. Mum and dad move into property A.

You sell property A in say end year 6. First three yearswould qualify for private residence relief as you were living there. Final 18 months would also qualify for additional relief.

You are left with 18 months that form chargeable gain forCGT purposes.

As far as property B goes for CGT purposes .. it is now your main residence from the timeyou moved in from property A to the time you decide to sell it.

Provided mum and dad are paying rent on property B, then this property would qualify for letting relief (page 6 of HS283).

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323679/hs283.pdf

I hope this is helpful and answers your question.

If there are no more issues, I will appreciate if you would kindly rate my service/accept the service I have provided before you leave the site, to ensure I get credited for it by Just Answer.

taxadvisor.uk and other Tax Specialists are ready to help you