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Vol 25 No 2 Feb/March 2020

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Private Residence Relief

ISBN13: 9781526505125
Publisher: Bloomsbury Professional
Country of Publication: UK
Format: Paperback
Price: Publication Abandoned

In the world of tax anti-avoidance, and with the ever-escalating value of property, private residence relief (PRR) is one of the few favourable reliefs from CGT available to UK home-owners.

The potentially significant value of this relief means that HMRC scrutinises its use vigilantly. Careful consideration needs to be given to the planning opportunities available and pitfalls that might be encountered, particularly in relation to the main residence election, and the development and sale of land.

Unsurprisingly, this relief therefore generates an enormous volume of ongoing case law and legislative developments. Anyone advising private clients will find this in-depth guide on PRR essential when identifying the legal framework, case law principles and how to apply the law to facts. It will cover all relevant factors in dealing with an HMRC enquiry relating to PRR, and issues to consider if appealing an HMRC decision.

Private Residence Relief explains how the relief works, the conditions of its use and where the relief may be restricted. It defines 'residence' and 'permitted area' and gives practical guidance on how and when to make a claim in main residence elections.

It describes how the relief can be measured, explains actual and deemed periods of occupation and the impact of lettings relief. Other uses of a residence are considered, for example for business purposes, as a property let, for adult care and dependent relatives and in relation to employer purchases.

The claiming of private residence relief by trustees and personal representatives is also discussed, as is the effect on the relief from transfers of property in the event of marriage, separation and divorce.

This book examines all these aspects of private residence relief against the backdrop of legislative developments and case law, using case studies and worked examples to illustrate planning points.

Part A: Establishing a relief claim

1: Introduction
Overview (how the relief works, CGT rates to the extent that relief is not covered)
Summary of recent developments

2: What is a 'residence'?
Only or main residence requirement
Occupation as a residence

3: Gardens and grounds
Permitted area
Larger permitted areas: factors
Planning points and pitfalls (eg selling the garden and grounds)

4: Main residence elections
Election conditions
Practical issues (eg how and when to make a claim)
Varying notices
Planning points and pitfalls

5: Non-resident CGT disposals
Determination of main residence
Main residence elections
Non-qualifying tax years
The day count test

Part B: Measuring the relief

6: Actual and deemed periods of occupation
Spouses and civil partners
Final period of ownership exemption
Delays in taking up occupation
Other deemed periods of occupation (and conditions)

7: Lettings relief

8: Relief restrictions
Is there a trade?
Business use, expenditure on improvements and enhancements, etc (TCGA 1992, s 224)
Holdover relief (TCGA 1992, s 226A-226B)

Part C: Other issues

9: Trusts and personal representatives
Private residence occupied under the terms of a settlement (TCGA 1992, s 225)
Implied trusts
Private residence held by PRs (TCGA 1992, s 225A)

10: Private residence relief and employments or self-employments
Job-related accommodation (TCGA 1992, s 222(8), (9))
Home purchase agreements (TCGA 1992, s 225C)

11: Separation and divorce
Disposals in connection with divorce, etc (Mesher Orders, TCGA 1992, s 225B)

12: Other disposals, etc
Adult placement carers (TCGA 1992, s 225D)
Disabled persons and persons in care homes (TCGA 1992, s 225E)
Dependant relative relief (TCGA 1992, s 226)