CG64944 - Private residence relief: ownership period beginning at 31/3/82
An individual bought the freehold of house E in July 1975 and
occupied it as his only residence until October 1980 when he bought
house F which he began to use as a second residence. He nominated
house F as his main residence within the time allowed by
TCGA92/S222 (5), see CG64495. He sold house E on 1 June 1992 for
£100,000. He made an election under TCGA92/S35 (5) within the
time limit allowed, see CG16800+, and it is agreed that the value
of house E at 31 March 1982 was £20,000.
His gain on the disposal of house E is computed as
follows.
| £ | |||
| Disposal proceeds | 100,000 | ||
| less | Value at 31 March1982 | 20,000 | |
| unindexed gain | 80,000 | ||
| less | Indexation 20,000 x 0.754 | 15,080 | |
| Net Gain | 64,920 |
PRIVATE RESIDENCE RELIEF
For the reason given in CG64943 we accept that because house E was his only or main residence at some time in the period of ownership defined at Section 222(7) he is entitled to relief for the final 36 months of ownership. So the relief due is
| 36 | x | 64,920 | = | £19,157 |
| 122 |
The chargeable gain will be £45,763 before annual exempt
amount.
NOTE. If a taxpayer is within the charge to Capital Gains
Tax, neither indexation allowance nor taper relief apply to
disposals of assets on or after 6 April 2008. Previously indexation
allowance had been frozen at April 1998. For indexation allowance
see CG17207+ and for taper relief see CG17895+.
