Private Residence Relief (PRR) Calculator

The Private Residence Relief (PRR) Calculator is a valuable tool that helps individuals avoid or reduce Capital Gains Tax (CGT) when selling their main home. Using the private residence relief calculator is particularly helpful for people selling their current home and purchasing another of similar value, ensuring the sale proceeds aren’t impacted by CGT.

The goal of the private residence relief calculator is to recognize that the value gained from selling a home is usually due to natural property appreciation rather than investment activity. Therefore, it helps protect homeowners from unfair taxation on those gains, making the private residence relief calculator an essential resource for homeowners.

When Does the PRR Calculator Apply?

The PRR calculator comes into play when you sell a home (including up to half a hectare of land around it) that has, at any time during your ownership, been your main residence.

While the private residence relief calculator might not apply for the entire time you’ve owned the property, you may be entitled to full relief if:

• The property has been your only or main home for the entire ownership period.
• You haven’t been absent, except for allowable periods like living in job-related accommodation.
• The garden or grounds (including any buildings) don’t exceed the permitted size.
• No part of the home has been used solely for business purposes (using a room for both personal and work activities won’t disqualify you from full relief).

What Is the “Period of Ownership” in the PRR Calculator?

The period of ownership is simply the total time you’ve owned the property, including both actual occupation (when you lived there) and deemed occupation (special periods when you weren’t living there but still count as occupying the property). Understanding the period of ownership is crucial when using the private residence relief calculator.

What Is Actual Occupation?

This is the time when you physically lived in the property and used it as your main home, which the private residence relief calculator takes into account for accurate calculations.

What Is Deemed Occupation?

Deemed occupation refers to specific times when you weren’t living in the property but are still considered to be occupying it. These periods include:

• The final nine months of ownership: This period is always exempt from CGT if the property was your main home at any point.
• Time spent abroad due to work: Any time you spent overseas for employment still counts.
• Up to four years of absence due to work in the UK: This includes employment or self-employment elsewhere in the country.
• Up to three years of absence for any reason: A general absence that can still qualify for relief.

To qualify for deemed occupation (except for the final nine months), you generally need to have lived in the property both before and after the absence. However, if work makes it impossible for you to return (like an overseas assignment), this rule doesn’t apply. These exceptions also cover your spouse or civil partner’s employment.

PRR for Non-UK Residents Using the PRR Calculator

Non-UK residents can also claim PRR on gains from selling a UK home using the PRR Calculator, but with some extra conditions. One important rule for non-UK residents is the 90-day rule: to qualify for PRR in a tax year, you need to spend at least 90 days in the UK property during that year. These days don’t have to be consecutive, but if you don’t meet the 90-day requirement, that year won’t count for PRR. The private residence relief calculator can help determine your eligibility.

Understand Complete Guide on Private Residence Relief Calculator

To make things easier, you can read our guide on Private Residence Relief (PRR)

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