Sold an investment or second property recently There are still some tax reliefs that could help to reduce your capital gains tax, but it's important to plan. Some landlords rushed to sell property in the lead up to the recent labour budget. Their fears were unfounded, as the capital gains tax rates remained unchanged.
I want to share a situation in which tax relief was not forthcoming.
A new client had sold a second property. They had spent a significant time abroad and had been non resident, but this was before they sold the property. There was a large gain, and of course, I was keen to explore the various reliefs and allowances that may be due to them.
Firstly Principal private residence (PPR)
They bought the property whilst abroad, but didn't actually live in the property.
Result - No PPR.
Dependent relative relief?
They said it was bought for an elderly mother.
Not eligible as this relief was abolished.
Relief for last 9 months?
No PPR for last 9 months as never lived in property
Re-basing as non-resident?
Result - Not applicable, as came back to UK before the property was sold
Letting relief?
No, as Clients were not living in property
Could we claim PPR as a requirement to leave home to work abroad
No, as only bought the property after leaving the UK
A little planning could have created a different scenario. eg, if sold whilst abroad.
They did manage to claim major improvement works though and the CGT rates still at 18 and 24%.
