June 2023 to March 2024 exams Watch free ACCA TX lectures
Where there has been a period of absence:
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Calculate the gain on the property.
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Compute the total period of ownership.
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Calculate the periods of deemed and actual occupation (see below).
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Calculate the PRR exemption as follows:
Gain
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Periods of occupation/Total period of ownership.
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Then consider letting relief, if applicable (see below).
Example 11 David bought a house on 1 April 1997 for £10,000. he lived in it until 30 June 1997. He worked
abroad for 2 years and then moved back into the house on his return on 1 July 1999. He lived in the
house until 31 December 2005 before leaving to live and work elsewhere in UK. David did not return
to the house and the house was sold on 30 June 2022 for £150,000.
Calculate the chargeable gain arising. 7.3. Business use Where part of a residence is used exclusively for business purposes throughout the period of
ownership, the gain in relation to that part is not covered by relief.
The last 9 months rule does not apply to that part unless the business part was at some time used
as part of the only or main residence.
4. Letting relief Letting relief is available to cover any gain not covered by PRR if part of the property is rented out
while the remaining part is being occupied by the taxpayer. Letting relief does not apply to let
property that is not the owners main residence.
Letting relief is the lower of:
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PRR relief given
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£40,000
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gain attributable to letting (which is still in charge after PRR)
Example 12 Dora Key bought a three-storey house on 1 November 2011 for £160,000. She occupied the whole
of the house until 1 May 2017 when she let out the top floor to a tenant up to when she sold the
house for £420,000 on 1 May 2022.
