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Will I pay tax when I sell my home?

17.05.2021

Private Client

If you own a property which has always been occupied as your main home, it is likely that any capital gain realised on its sale will not be taxable because it is relieved by ‘Private Residence Relief (PRR).

 

If you have not always lived in the property - Private Residence Relief (PRR) may be available to relieve some of the capital gain realised.

 

You must have occupied the property as your main home at some point during your period of ownership for Private Residence Relief (PRR) to be available at all.   

 

There is a misconception that occupying a property, as your home, for a short period before selling it will exempt the whole capital gain.  Sadly, this is not true. 

 

Private Residence Relief (PRR) is applied to the fraction of the capital gain attributed to the time the property has been occupied as your home – plus the last 9 months of ownership (regardless of whether you were living in the property at the time).

 

What happens if you live in two homes?
 

What happens if you can’t be physically present in your home for a period of time?
 

PRR is a complicated relief but, with careful planning around periods of absences, it can be managed.

 

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Capital Gains realised on the disposal of residential property are reported to HMRC, together with the Capital Gains Tax payable, within 30 days of completion. 

 

That’s no time at all …. 

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