How Does Private Residence Relief Reduce Capital Gains?
Private Residence Relief (PRR) is an exemption relief that helps reduce capital gains rather than deferring them to a later date. With PRR, you can replace your existing home with another one of a similar value while ensuring that the gain on the sale of the old home is not liable to capital gains tax.
Qualify for Private Residence Relief: Are You Eligible?
To claim a FULL PRR, you are required to meet the following conditions:
- You have lived in one dwelling house as your primary residence throughout your ownership period.
- You have not been absent other than any allowed period of absence or because of living in a job-related accommodation during your ownership period.
- The grounds and buildings are not greater than 5000 square meters.
- You have never used a part of your home exclusively for any business purposes.
- You didn’t purchase the property merely for its financial gains.
How to Claim Private Residence Relief?
Once you have confirmed that you qualify for PRR, you need to write ‘Private Residence Relief is claimed’ and the amount of the relief claimed in box 54 on page CG 3 of your computation of the gain on any relevant disposal.
If you want to know more about Private Residence Relief, check out our complete guide by clicking the link.