Changing legislation in Capital Gains Tax


Steve Wheeler, Private Client Tax Partner, at Moore Stephens outlines the changing legislation in relation to Capital Gains Tax on a primary residence.

UK resident individuals are, in general, liable to capital gains tax (CGT) on disposals of any assets, whether situated in the UK or overseas. Non-resident individuals are liable to CGT only on disposals of UK residential property, or of the assets of a UK business.

For both residents and non-residents there is an exemption for gains on the disposal of an individual’s ‘principal private residence’ (PPR). A husband and wife always have the same PPR, except in cases of marital breakdown.

A property may be treated as the PPR for a tax year (either as a result of a nomination procedure or on the basis of the facts) only where either (i) the individual or spouse has been tax resident (as defined for this purpose) in the same country as the property for that tax year, or (ii) the individual or spouse has stayed overnight in the property at least 90 times in the tax year.

Individuals trying to reach this 90-night threshold need to bear in mind any possible effects on their residence status. Generally, non-UK residents will not have their main residence in the UK and so the relief will not apply.

If a property is an individual’s PPR for only part of the period of ownership, a proportionate relief is given, and the last 18 months is counted as part of the exempt period in any case.

The relief is available for periods of letting, up to a limit of £40,000 of gains (less in some cases), and for certain limited periods of absence, mostly work-related. Individuals who live in job-related accommodation (as defined) may be eligible for the relief in respect of a property that they intend to occupy as their main residence in due course.

A residence owned by a company can never qualify for the relief, but a property owned by a trust and occupied as the main residence of a beneficiary can qualify in certain circumstances.

To discuss, please contact Steve Wheeler, Private Client Tax Partner at Moore Stephens (

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