There are several capital gains tax (CGT) reliefs available on selling privately held assets.

There are capital gains tax (CGT) reliefs available on the sale of some privately held assets, which are set out below:

Principle Private Residence (PPR) Relief

Any gain arising on your PPR is exempt from CGT. You can nominate your PPR, if you own more than one property, and there are detailed rules regarding how periods of non-occupation of the property, including letting, can qualify for relief. These periods include (subject to certain conditions):

  • Any period or periods of absence which are not more than 3 years in total;
  • Any periods of absence when working outside the UK;
  • Periods of absence of up to 4 years when required to live elsewhere for the purposes of a UK employment (or such employment of a spouse); and
  • The final 18 months of ownership in all cases where there has been a period of residence.

In the case of 1 to 3 above, there must be a period of residence before and after the period of absence in order to obtain relief.

PPR relief may also be available where a property has been occupied by a dependent relative, as this can be deemed to have been an individual’s PPR.

In order to make a successful PPR claim, you need to demonstrate that you have moved into the property with the intention of living there on a permanent basis, not for any temporary purpose, and they would need to show they are occupying the property as their main home.

In addition, where the taxable portion of a period of ownership was not occupied as a result of letting out the PPR as residential accommodation, then the portion of the gain relating to the letting period of ownership will only be chargeable where it exceeds the lower of the PPR relief on the property and £40,000. This is known as “Letting Relief”.

Chattels

These are assets that you can physically touch and move, i.e. they’re tangible and moveable. Special rules apply to certain chattels: you should not have to pay CGT on cars, ‘wasting assets’, which are assets with a limited lifespan that often lose their value over time (e.g. racehorses) or assets that are worth £6,000 or less at the time you sell or otherwise dispose of them. Even if the proceeds are more than £6,000 the chargeable gain is limited to 5/3 of the proceeds over £6,000. For jointly owned assets each owner’s share of the possession when it’s sold or disposed of is compared with each person’s limit of £6,000.

If you would like more information regarding the capital gains tax reliefs that are available on privately owned assets, please contact Tax Innovations on 01962 856 990 or customerservice@taxinnovations.com.

For an initial consultation please call us on 01962 856 990 or visit our contact page.